I have been working for a new company for a few months now but have never understood their car allowance sceme. I think i am loosing too much money with it.. what do you guys think


I get a car allowence of £250 per month for using my own car (scooby)
I am doing abount 25K miles a year

When i submit my Milage my company takes the money out of my car allowence to pay me my milage !!
If i do a lot of miles in a month my car allowence is negative, so i loose money from my wages

The company says that i benefit more because i dont pay any tax on the milage expenses then..


whats your view on this ?

 

LOL

 

Sounds like your getting shafted mate!

 

They are robbing you.

Steve

 

Being Shafted bigtime ! - you should get at least £4,500 a year for the car and get the fuel extra.

You can also claim the difference back from the tax man if they pay less than 40p a mile for business miles.

 

i thought i was.. cheap *** company.. i nearly got in a fight with the finance director last time i talked to them about it..

 

Can you not do the whole company car thing?

 

Sounds like a load of cowboys.

You pay peanuts, you get monkehs!

 

nope.. i am trying to find my contract as i am sure it stats that "we will pay your petrol"

The scoob is costing too much to run

 

I'd try for a company car first, failing that buy a banger!

 

[quote= failing that buy a banger![/quote]


Good plan but you dont wanna look a complete chav tw*t in an old nova though

 

You're getting shafted

As stated, the "standard" payment is 40p a mile. You can claim this much completely tax free. With your mileage that means you can be paid £10000 tax free.

If they pay you less than that then you call fill in the difference in the "expenses" section of your tax return and claim tax back on that.

I agree with the buy a banger comments. Get the most cheap, nasty, horrible car possible that is really off putting to your customers and gives a bad impression of the company. When they complain, ask them to stop ripping you off on the mileage.

 

apparently they pay me 36p a mile, but that is from my car allowence, so should i stop claiming milage and then just claim it from the goverment ?

 

Car allowance pays for the car, not the petrol. You should be getting paid petrol costs on top of that.

 

IR tax limits 40p to the first 10k miles IIRC. Thereafter it is 25p per mile.

I get 40p a mile, so I pay tax on 15p @40% for every mile over 10k miles.

 

Most companies who pay a company car allowance or run a scheme providing a company car have a reduced mileage rate as the IR limit is supposed to include wear and tear etc. Typically this can be as low as 10 per mile.

Don't quite understand what this company are doing though as you don't get taxed on business mileage apart from in the illustration I gave above.

 

I thought they'd changed it now. Used to be 40p for first 10k, then 25p but you could also claim tax relief on insurance, tyres and crap like that.

They got rid of all the reliefs and made it 40p full stop in order to simplify things.

Either that or I recently cocked up my first (and only) tax return. They said I owed them 50 quid after I sent if off, then said they wern't going to bother sending me a tax return this year.

 

find another job.
its probably costing you over £80 per week easy (based over the year) so you will be losing £70 minimum over a 4 weekly period over the 12 months

 

My scoob is my only car, but as I commute on the train into London from essex on the train each day I dont really use it for work purposes. I do get 450 a month for Car allowance though and an all star card they pay the fuel on. All i know is if I do company mileage I get 12p per mile as opposed to 38p a mile if I had no car allowance, and I can claim the mileage back from the revenue in reduced tax. All I know is my fuel card is great i pay 40% tax on it but hell 40per litre is a lot better than a quid

You sound like you are getting a royal one up the proverbial.

 

Buy a Diesel.....

 

this is the reply i got from the finance director

The car allowance paid in your salary is an advance on your business miles wear and tear (which is taxed) . When you submit a claim for mileage in your expenses we pay you per mile 25p Wear and Tear plus a fuel allowance based on your engine size (typically 12p per mile) and deduct the 25p back from the car allowance. In this way you receive your mileage claim tax free.

Your last three car allowance paid as follows

Apr06 (£46.75)
May06 £250
Jun06 £48.25

I check that each person does not have more deductions than car allowance paid each time I run the payroll.

If you want to switch to the Inland Revenue guideline payment of 40p per mile then you would not receive any car allowance in your salary.

 

I get 11p a mile (and i am self employed )

It is 40p a miles but i think for the first 2000 miles..

. ....though it depeneds really why should they pay you to use your car, when its cheaper to use public transport...so i just end up using the trains etc....

 

But once you do more than 1000 miles a month, they can't carry on deducting 25p per mile off your "allowance", because that is then coming directly out of your own pocket

Oh, and bona-fida mileage claims of up to 40 per mile are tax-free anyway - so he is bull-****ting you there,

Unless my job contract specifically said that i must drive my own car, i would refuse to go more than a thousand miles a month - until they offered a fairer deal!!!

mb

 

Ahh, the deal seems a little more reasonable after reading that explanation.

Basiically you get a guaranteed minimum payout of £250 each month, paid as wages and therefore taxed.

As you do miles, some of that £250 is converted into actuall car allowance which is tax free. The gross amount paid by the company is the same but the net amount in your pocket will increase a bit.

Once you've done over 1000 miles, you are into the realms of pure car allowance, so the gross amount is increasing and the whole thing is tax free.

Not a bad scheme, 25p is a bit stingy and it could be made more tax efficient, but not bad.

There will be a cut off point where the inland revenue 40p/mile arrangement will work out better for you, I'm not sure what it is exactly but if you are doing more than 625 miles per month then the 40p scheme will benefit you.

Also the 40p scheme will be of most benefit if you can't be arsed to fill in a tax return

 

Looks like you have

http://www.smithpearman.com/tax_tabl...ee_mileage.htm

 

They are screwing you !!!
My company pays 550 per month car allowance and we get a petrol card (private mileage paid for by them)

 

your getting done mate my previous company paid me 470 per month car allowance plus gave me a petrol card which was fine to be used with optimax and the allowance was set to 700 per month so covered personal fuel as well

 

same here. monkeh - no doubt about it, they are taking the p1ss!

a friend of mine never bothered with his driving test years ago, so when he was 20 odd he was still without transport. his company moved and offered to "help" him get his own set of wheels and he decided to take his CBT. bloody stupid idea as he used to have trouble walking in a straight line (too much time in the pub LOL) but anyway he bought a new vespa t5. can;t remember the cost, but probably around £1,500-£1,700 new. the company, in their wisdom decided to buy it in their name as he had no credit rating. being extremely gullible, he went for this and repaid the company every month (after paying tax on the income). i think he was paying about £20/month more than it cost them but to cut a very long story short, he ended up paying at least 150% of the cost and they sacked him, kept the bike and sold it on! took him about a year to work it out! you don;t work for a telemarketing company in essex do you monkeh!!??? [i suspect not]