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  1. #21
    Super Wammer montesquieu's Avatar
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    Car allowance is taxed, yes (of course)

    But a company car is a double hit:

    1) you don't get the car allowance (obviously) so that's 350 a month less before tax that you would have had.
    2) you also pay 'benefit in kind' tax on a proportion of the new retail price of the car, based on two things, first of all the carbon emissions of the car (HMRC have a league table for cars, which enables you to calculate the figure taxable as 'benefit'), and your marginal tax rate (whatever your highest tax rate is depending on the size of your salary e.g. 23, 40 or 45%).

    http://www.hmrc.gov.uk/cars/index.htm

    It's complicated and other than for high mileage drivers or for the self-employed who can fiddle the books, company cars haven't really been tax-effective for years.

  2. #22
    Moderator meninblack's Avatar
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    LOL, if only my employer offered a choice! I didn't even get to choose the colour of the Nazi Shitewagen, let alone anything else....
    "I'm a Twat" - Cloth-Ears, 02/02/2014

  3. #23
    What I need are morons It Cost How Much!?!'s Avatar
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    Quote Originally Posted by meninblack View Post
    LOL, if only my employer offered a choice! I didn't even get to choose the colour of the Nazi Shitewagen, let alone anything else....
    Don't be ungrateful, it could have been an Astra

  4. #24
    Wammer MrMister's Avatar
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    Thanks for all the input. As an aside, I've been offered a 2003 Honda Civic by a mate of mine for c4k, however it is the Type R version (200bhp, probably 30mpg if lucky) but in theory I can buy it with cash and then use the allowance to run it (insurance will be high, as will fuel consumption and tax) but in many ways I prefer this to the idea of a 2-3 year old car. Firstly, the initial outlay is very low and if I find that I don't like the Civic, I can sell it on in a year or so fairly easily. Secondly, and this is the main point for me, I am still unsure as to the number of miles I will be doing per year. This makes any consideration of wear and running cost fairly difficult to calculate, as it could be as low as 8k miles (local work) or up to 20k miles depending on what I'm asked to do. It is my gut instinct that I won't do the huge miles I had feared initially, so the Civic wouldn't seem as ridiculous an idea as I first thought. If it turns out that I do end up covering vast distances, I can always sell it.

    As far as I am aware, the allowance is taxed as salary and I can choose how I wish to spend it (and the car choice is entirely up to me). So essentially 350 p/m and spend it as you like. Insurance is likely to be 800-1k on a car like that, I should imagine.

    Am I asking for trouble with a 2003, 75k mile Civic Type R? Or should I take the plunge? Cheers

  5. #25
    Super Wammer mikehit's Avatar
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    Quote Originally Posted by montesquieu View Post
    Car allowance is taxed, yes (of course)

    But a company car is a double hit:

    1) you don't get the car allowance (obviously) so that's 350 a month less before tax that you would have had.
    2) you also pay 'benefit in kind' tax on a proportion of the new retail price of the car, based on two things, first of all the carbon emissions of the car (HMRC have a league table for cars, which enables you to calculate the figure taxable as 'benefit'), and your marginal tax rate (whatever your highest tax rate is depending on the size of your salary e.g. 23, 40 or 45%).

    http://www.hmrc.gov.uk/cars/index.htm

    It's complicated and other than for high mileage drivers or for the self-employed who can fiddle the books, company cars haven't really been tax-effective for years.
    I see where you're coming from now: I misunderstood your original post. I thought you were saying that you paid 'benefit in kind' tax on the car allowance, but instead you were saying that is a negative of having a company car.

    Personally I prefer having a company car - although it may cost a bit more I find the convenience of having everything managed by a fleet manager is great, and I would spend the money I pocket which means when it comes to forking out for new tyres or a service I am always struggling.

    - - - Updated - - -

    Quote Originally Posted by MrMister View Post
    Thanks for all the input. As an aside, I've been offered a 2003 Honda Civic by a mate of mine for c4k, however it is the Type R version (200bhp, probably 30mpg if lucky) but in theory I can buy it with cash and then use the allowance to run it (insurance will be high, as will fuel consumption and tax) but in many ways I prefer this to the idea of a 2-3 year old car. Firstly, the initial outlay is very low and if I find that I don't like the Civic, I can sell it on in a year or so fairly easily. Secondly, and this is the main point for me, I am still unsure as to the number of miles I will be doing per year. This makes any consideration of wear and running cost fairly difficult to calculate, as it could be as low as 8k miles (local work) or up to 20k miles depending on what I'm asked to do. It is my gut instinct that I won't do the huge miles I had feared initially, so the Civic wouldn't seem as ridiculous an idea as I first thought. If it turns out that I do end up covering vast distances, I can always sell it.

    As far as I am aware, the allowance is taxed as salary and I can choose how I wish to spend it (and the car choice is entirely up to me). So essentially 350 p/m and spend it as you like. Insurance is likely to be 800-1k on a car like that, I should imagine.

    Am I asking for trouble with a 2003, 75k mile Civic Type R? Or should I take the plunge? Cheers
    I think your reasoning is sound and the Type R is pretty reliable car. But its features are a bit spartan so check what it has been fitted with - it is a 'rally' version of the road car and is not as comfortable as the standard Civic so try and get a test drive, preferably for more than a quick spin. And the price can't drop much more so you will not lose much on resale.
    Once you know the running costs, as has been suggested I would look seriously at hiring a car. For 5,000per year that will be 105 per week (based on 48 working weeks per year) which could get you a compact hatchback for 3 days plus petrol - plus you don't have the hassle and worries of parking etc. A friend of mine lives in London and does just this for their weekend trips every week. But as mentioned earlier, buying a company car can let you build up your won no claims bonus if you decide to get a private car again.

  6. #26
    Wammer MrMister's Avatar
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    Right, I've had a few insurance quotes for the Type R, that is NOT happening; ridiculous premiums (1k plus). So, back to the drawing board. I'm leaning more towards a Golf TDi, maybe 2003-2006, if possible a higher spec version. I'd hope to get much better mpg, lower tax and of course, lower insurance. I'd imagine parts would be roughly the same as the Honda, but I won't (and cannot bring myself to) pay that amount on insurance. I'd never use it to it's full potential either.

    Does a Golf seem like a sound idea? I've seen a few with <100k miles (GT Tdi etc) for c4-5k.

    Cheers for the help, Mr Mister

  7. #27
    Moderator meninblack's Avatar
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    Golfs of that era are a bit hit-and-miss - you can get a good one, or a right lemon. The diesels had various issues, depends entirely which OEM water pump, turbo etc is fitted. Good ones go on and on, others can be a costly nightmare.

    Why not look for a normal (non Type R) Civic? The petrol ones are excellent, and bulletproof.
    "I'm a Twat" - Cloth-Ears, 02/02/2014

  8. #28
    Wammer karlinamillion's Avatar
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    I'm going to chuck a curve ball in here by saying;
    Citroen C6
    Ultra luxy, 3-4 years old, 10k (45 new)
    If it ain't going in, it ain't coming out

  9. #29
    Pac67
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    Type R is a little uncompromising and not the most relaxing drive plus the suspension will knock your fillings out. As you've found, the insurance is a joke. If you want performance on an older reliable motor and reasonable insurance, BMW 325 or 330 makes a good buy (E46 or later model).

  10. #30
    Wammer
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    Get a b5.5 passat, all the features and performance of a golf but 2x cheaper. Or a skoda.

    The salespeople my way are quite a hilarity, I live in a posh area but no one buys brand new cars (because they are a waste of cash) so everyone has 07 year cars because thats the best age/price combo. Then you get all the door to door gangs in their 12 a4's and you know exactly who they are and to avoid them.
    Wanted: Harman Kardon HK680/690. PM Me.

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