Company car vs allowance

B

Billyp

Guest
I'm fairly sure this thread comes up time and time again but I can't seem to locate one. I'm just about to start a new role with an Irish company. They have offered me the option of a car allowance of €14k pa or a company car to the value of €42k. I will not be doing any business miles of note but I expect average personal km's will be around 15,000 km mark.

Really need some good advise as which to opt for. Anyone out there recently done the sums on this or maybe mave a calculator to help me figure this out? Cheers BillyP.
 
If your doing 15000 or less p/a Its as if you get €12600 extra sal each year which will be taxed in your wages.

http://www.fixmytax.com/benefits-in-kind.html

The €14000 mileage expenses is not taxable so ita defo the better option.

"
Car allowances
In order to avoid the BIK altogether, some companies and employees are opting for car allowances rather than actual vehicles. Employees are entitled to tax-free reimbursements for business-related expenses.
But the Revenue strictly stipulates that expenses qualify for deduction "only when they are incurred wholly, exclusively and necessarily in performing the duties of the employment". Items such as travelling to and from work do not qualify"






Company Cars are never a good idea unless your doing major Miles evary year and note! Regardless to the age of the car you always pay your BIK or the original cost the day the car was registered. I.E if you accept and keep that car for 3 years youl still be paying 12600p/a on it!



Go for the mileage!
 
OP never said the car allowance was tax free.

Its not that hard to work out...

I'm not an expert but the co. car will cost you 30% of the value off your tax credits every year so will cost you approx 41% of the 14k in extra tax, whereas you will get 14k gross every year.

I took the allowance as we only offer GM listed cars and I would like a better choice of car to drive in.
 
If you are doing no business miles then the car allowance is a better option. Your €14K will be taxed at your rate of taxation which I would assume is 42%.

If you opt for the company car this we be taxed at 30% of the market value of the car and added on to your monthly salary as additional income and taxed plus the PRSI.

My advice is to go for the car allowance.
 
Still not sure sure based on the comments above. By going with the allowance of €14k gross I will net roughly about €8k a year or say €660 per month which is great and all that. If I opted for the car I reckon it would cost me (very roughly) about €600 from my net wages a month (€42kx 30% BIK less 42% income tax). But based on what AA Ireland say anout running costs per km for a 2 litre car (see link) [broken link removed] it could cost me up to €17k a year net to run a car of that size/value! I know that seems savage high but that's what they reckon. Can someone sense check these numbers cause I reckon I missing something here!
 
Got a perfectly good car (07) at the moment worth €35k -loan is paid off. Think I should sell it, invest the money and take the company car.

What do you reckon -seems to be a number of variables here to consider.
 
To answer your question tosullivan - I will get the allowance anyway -could cycle a bike if I wanted to or drive a banger!
 
if you've got a 07 and happy with it, then keep it as it will have done a lot of depreciation already.
You could always trade in aswell and trade up
 
Hi All
I am also looking at opting out of a company car and taking the car allowance does anyone know what % of tax a BIK is charged at. Also would the car allowance added to my salary be subject to tax and NI.
 
Does anyone think the option of car allowance is now worse than having a company car since the introduction of all the extra income levies and health levies?
 
kfpg said:
Does anyone think the option of car allowance is now worse than having a company car since the introduction of all the extra income levies and health levies?
Click to expand...

And likely to be taxed more after the next budget.
 
What effect has the recent budget had on this ?I am debating taking the option of car allowance €16k gross V company car,little business mileage so BIK will be 30% of car c €40K, option would be 318 11 basic model V 08 520 with full spec.
Any and all advice greatly appreciated.
 
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