swerv

i should imagine there are quite a few of you who know about how company car tax works, i need some info.

example car , ford focus 1.6 5 door.

how would you work out company car tax, ive looked on a few sites but there are questions i dont fully understand.

so anyone who knows quite about this subject i would like some help.

btw im not getting a ford focus or a company car

Exeter J

IIRC Your tax free allowance [i.e. your tax code] gets adjusted according to the Carbon Dioxide emissions and list price of the car.

focusv8

http://www.theaa.com/allaboutcars/co...sp?page=cartax

swerv

what is ,

A: montly contribution

B: personal capital contribution

what do these mean?

also is the tax affected by wether you have the use of a fuel card or you pay for fuel out of your own pocket?

C9VEV

Had a company car for years but still dont really understand, as a rough idea take about 18-20% of the list value off your tax code.

For example a 1.8 tdci 115ps focus takes about £3200 off your tax code so you pay income tax on that £3200 @25% = £800 a year out of your arse pocket.

Best way tho mate, at the min ive got 55 plate focus TDCi 138ps (with optional 17"s whoo!) and I get to kick the shit out of it all the time, free diesel, free tyres, free everything!

focusv8

A, Do YOU pay the company anything for the use of the car

B, Did you pay anything towards the purchase of the car.

Last question see answer A,

swerv

cool thanks for that.

is that based on you providing your own fuel or would a company fuel card/claiming expenses put that up?

thanks

C9VEV

Our company runs a fuel card system, we have to do montly mileage returns which we totally fiddle to show all business and next to no private miles say 50 or so, our mileage form is set up so that it shows an amount we owe the company each month if its under about a tenner they dont bother askin.

We do this to avoid having to pay private fuel tax which is another £3k off your tax code, the idea is that should the taxman come knockin we can prove we pay for our private fuel.

Just nipped up the garage to juice up, fancied a bit of bp ultimate diesel 101.9 a litre! but when u aint payin who cares!

By the way u aint the taxman r u??

Iain Mac

Funnily enough the taxman is aware of these scams and, when the time comes for them to audit your employer (on average, every 6 years or so), they will run employees mileage claims through Autoroute and any mileage claimed above 105% or thereabouts of the software mileage for the journey will prompt questions.

No need to hit the panic button, just be aware of the risk, and try to avoid taking the piss because guess who is most likely to get their records checked?

And yes, my company had this happen just last year, so I am speaking from experience.

M Brian

i have to reclaim my fuel - I get 9p a mile as its a sub 2.0 litre diesel...

these are the robbing government tax free rates! any higher than this and they can tax you on it!

as said by many others - youre taxed about 18% of the value of the car - think thats knocked off your tax code... so if youre in the 40p tax bracket!
the car costs you alot of money in tax in affect - BUT no other way around it - as if they give you 3k in your pay packet to get your own car youd still have to pay the same tax - plus national insurance aswell.

i could of opted out of my scheme and had cash in pocket... but
could I buy a car (has to be under 4 year old) insure it for business use. tax it, service it, MOT it, suffer the depreciation on high mileage and risk to no claims bonus knocks dinks etc etc.... for less than 3.5k a year. answer was nope.

well worth it IMO.

average spec focus - have alook on them sites and it will cost you about £55 a month in your tax - if they pay everything for you

Iain Mac

Lets knock this £18% thing on the head: The % will range from 15% (for a small petrol engined car), up to a maximum of 35% and is entirely dependant on the model chosen.

Every car sold in the UK has an official CO2 grammes per Kilometre figure, and this decides the % of the List Price When New that you pay tax on.

From 1/1/06 the 3% supplement for Euro 4 compliant Diesel engined cars has been reinstated, as - effectively - it is now illegal to sell a non-Euro 4 car. (The exception is if the car was built before October 2005, it can still be sold and registered up to the end of this year)

The HM Revenue & Customs website has an easy to use calculator, but you need to know the figures applicable to your car when new:
http://www.hmrc.gov.uk/calcs/cars.htm

Taking a standard new-model Focus 1.6 LX 100PS manual (need the exact model to be specific, because even something like different wheels/tyres can affect the CO2 rate), the current list Price is £13,395 and the CO2 figure is 184g/km. That means your taxable BiK is £3080.85(£13,395 x 23%) so the car actually costs a 22% taxpayer £677.78 or £1232.34for a 40% taxpayer.

The fuel benefit is entirely separate, and the current scale charge for ANY private fuel being provided is £14,400 to which you apply the same % as calculated for the car benefit, in this case 23%, so you pay tax on £3312 and meaning the "free" fuel costs our 22% taxpayer £728.64 or £1324.80 for 40% payers.

And I do this as a day job.

swerv

excellent information , thanks thats just what i was looking for!!