Is it worth me getting a company car?
The first question is always why do you want a company car and what do you want to use it for, in many cases a van or low emission car
iQ driven to #autotweetup by Scott Brownlee
may be more appropriate, depending on the use it may be free or a low cost benefit. However if you are looking for a regular family car the benefit is worked out based on list price and CO2 emissions:
- List price is the manufacturers list price and should include cost of any extras, not normally the price you pay for the vehicle
- CO2 emission figure is the number quoted on the registration document, beware of using calculators on price guide sites as these may not be correct (as in example below). This is translated into a percentage (annually increasing by 1%) which is multiplied by the list price to work out the benefit charge
- Fuel benefit is charged at the same percentage rate on a fixed sum of £18.8k
So if you are looking for a regular sporty family car eg Aug 2010 Vauxhall Insignia CDTi Sri 130 the benefits are as calculated as follows:
- Car benefit – CO2 emissions of 154g/km translate into a 21% rate to which 3% is added for diesel cars. Based on a list price of £23,395 the benefit is £5381
- Fuel benefit is £18,800 X 24%, £4512
- The cost to the employee as a basic and higher rate taxpayer is £1978 and £3957 respectively
- It is only worth taking private fuel if driving more than 12000/6000 miles pa as a 40%/20% taxpayer (based on £6/gallon and 40mpg)
LFA at 7 Hotel Diner #autotweetup
At the #Autotweetup at the 7 Hotel Diner there were cars from both ends of the spectrum, a Lexus LFA and Toyota iQ, and for comparison purposes the benefits on these would be:
Lexus, list price £330k, emissions 379g/km, so 35%:
- Car benefit – £115,000, fuel benefit £6,580
- Cost to employee as 40% taxpayer £48,632
Toyota iQ 1.3VVTi, list price £12,976, emissions 113 g/km, so 10%
- Car benefit – £1,298, fuel benefit £1,880
- Cost to employee as 20%/40% taxpayer £635/£1,271
There are many choices to be made and the most important issue to consider is what is the car needed for, opening up different opportunities. This article is only for general information and there may be other conditions which apply to your situation so please seek professional advice before taking any steps based on the information shown. If you would like advice in this or other areas feel free to call. Alastair Wood, AW Accounting, Gravesend, Kent – Accountants who “speak your language”
