Date: Wed, 5 May 2004 20:02:59 +0100
From: "James and Sophie" <>
Subject: Re: My first Saab

Tax laws on company cars changed a couple of years ago - the 18k threshold no longer exists. Taxation is based on value of car and emissions. People driving thirsty cars are hammered. My car has a new value of approx 16k. With its relatively low emissions it has a rating of (i think) 18%. So I essentially get a taxable benefit of 18% * 16k. I therefore pay tax (at 40%) against that figure. I also get taxed on my private fuel. Each month the use of my car "costs" me (in tax) circa 200. This would be great if all my miles were private (including commuting), as they were until 2 months ago. I had a fully expensed car for my journey to and from work (return trip of 75 miles) and the odd bit of business mileage. It would not work for me to opt out and have a decent car. Opting out means no fuel card etc. Now, with a change in role, every mile I do during the week is effectively business related. So if I opted out I would: 1) Save approx 200 per month in income tax. 2) Receive a reasonable lump sum as a car allowance (albeit taxable). 3) Be able to claim 12p per mile for every business mile back from the company. 40,000 miles a year give me 4800 tax free. 4) Be able to claim tax relief from the inland revenue on the difference between 12p and 40p for the first x miles and the difference between 12p and 25p for all other miles over x. I think x is about 25k miles. This is something that is often overlooked. So all in all, after I have allowed for cost of fuel, I have approx 700 a month (after tax) to finance a car (eg 2 yr bank loan), insure, tax and maintain. At the end of the two years I then have an asset to do with what I want - eg keep and continue using (why I chose a saab - :-) ) or sell and use as a deposit towards the next. Cheers James Ps - thanks for the financial concern :-) and the advice on the car. "Andy" <> wrote in message news:Ue4mc.65$yD2.34nospamfe1-win... > If you are doing 40K miles per year, I would seriously consider if it will > be worth opting out of the company car scheme. You will need to consider a > new or nearly new low mileage car for that kind of money. 40K per year is a > lot of miles to put on your own car. > > If the car is off the road, who is responsible for you not getting out for a > day or so? > > I used to cover 50K per year, and looked at opting out. The conclusion is > that its not worth it. You already get a tax break for doing over 18K > business miles. Better to reduce the tax burden by going for a lower > emissions car. Also elect to pay for private fuel (all or some) this will > reduce the tax liability. > > Its tempting to take the money, and think about how much you will save by > buying a used or cheaper car, but the reality is very often far from this (I > know). I am now self employed and running my own car, covering approx. 25K > miles per year, wishing I had a company car back. > > Opting out is generally more beneficial to people with "perk" cars who do > very little business miles, and have a high tax load as a result. > > The Saab is a great car though. > > Hope this helps > > Best Regards > > Andy > > > "James and Sophie" <> wrote in message > news:FKUlc.296$wx5.98nospamfe1-win... > > Looking to opt out of my company car scheme at work (UK). I currently have > a > > Passat 130tdi and am considering a 2000/2001 ish 9-3 tid. > > > > Anything I should look out for - looking to spend 8k and I do about 40k > > miles a year (mostly business on motorway). > > > > Cheers > > > > > >

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