Company Car with a value up to €30k or a monthly car allowance equivalent to €10k pa

A

aidinho

Guest
Hi,

Recently I was offered the choice of a company car with a value up to €30,000 or a monthly car allowance equivalent to €10,000 per annum. I couldn't afford the BIK on a company car so went for the latter option.

Prior to this I received a mileage allowance of 50c per mile. Ordinarily I do close to zero work travel but occasionally can have weeks where I could do 1000 miles plus. On an annual basis my business mileage still wouldnt exceed 10,000 miles. I've been informed that as part of the car allowance deal I wont be getting any contribution to petrol (or tax, insurance, etc.)

I know this has been discussed before, but not fully answered. Am I getting a raw deal or did I just make the wrong choice? Not getting a petrol contribution acts as a huge disincentive to travel when the need does arise.
Thanks.
 
Re: Mileage with Car Allowance

Benifit In Kind tax

Company cars are taxed at 30% per annum of the purchase price of the car.
 
Re: Mileage with Car Allowance

BIK = Benefit in Kind. Benefits in kind are benefits, which are received from an employer that cannot be converted into money but which nevertheless confer a benefit on an employee. ie company car. Most benefits are taxable.
 
Re: Mileage with Car Allowance

I wouldn't say you're getting a raw deal. You are getting approx 10000 per annum to make your car available for company use. This is what covers your costs like petrol etc. Otherwise it would be money for nothing at all.
 
Re: Mileage with Car Allowance

hi moi,

Well I see your point. I'm not really asking if I'm getting a raw deal overall - getting an extra €10,000 a year for doing no extra work is never a raw deal (Given about 8,000 business miles a year I would previously have been able to claim about €4,000). What I'm really asking is if this is standard practice i.e. do people who get car allowances generally not get petrol mileage?
 
Re: Mileage with Car Allowance

Yes

It would be standard practice. I have had a company car/allowance for years and most companies I worked for wouldn't pay on top of that.
 
Re: Company Car with a value up to €30k or a monthly car allowance equivalent to €10k

Since this is primarilly a tax question Ill move it from Car related issues to Taxation.

aj
 
Re: Mileage with Car Allowance

My last employer paid a car allowance plus a 'per mile' allowance which was much lower than the 'per mile' allowance paid to those employees who didn't get a car allowance.
 
If you are expected to do business miles but your €10k covers 'everything'... then what is the company position regarding insurance if you are involved in an accident.

Aside from that, not sure how you worked out that you could not afford the BIK.... did you work out your costs. i.e the BIK works out at 30% of the value of the car p/a which is taxed at (presumeably) 42%. So in this case, your BIK would be around €4k. So for that amount you have your tax, insurance, petrol, servicing etc covered.... as opposed to the pre tax €10k allowance .. which is required to pay for all of the above + the cost of financing your car (depreciating)....... maybe I'm missing something there though....

ninsaga
 
Their is a fair chance that when you take the allowance, you won't actually buy a €30k car - you'll buy a €10k-€15k car and pocket the difference.
 
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