[Ti Rich]

I get 40p per mile business and 40p per mile driving to work and back (80 mile round trip but taxed) and a 6k car allowance. Not too bad a deal ?

[pjs]

It costs an awful lot to run a car via a car allowance and mileage payments. You still get taxed on the car allowance, surely most of us at 40%, so a £6k car allowance = £300/month - that doesnt come close to the real cost of running a nice e90.

Fuel will be approx 15-20p mile, so anything above that contributes towards your running costs and depreciation. Anything under that is a crime

[m1bjr]

Originally Posted by NFS

You can have a perfectly acceptable company car now which will return 60mpg.

Really?

I have a318d stop/start and its one of the most efficient out there.
I struggle to get above 60mpg on a regular basis.
If you live in say, Cumbria, then there is absolutely no way.
Factor in that some of us carry large loads (test gear circ 200KG in my case) and that number is impacted severely.

With the rate of fuel duty set to rise again very soon, 12ppm just isnt enough!

S.

[catdog1121]

Originally Posted by pjs

It costs an awful lot to run a car via a car allowance and mileage payments. You still get taxed on the car allowance, surely most of us at 40%, so a £6k car allowance = £300/month - that doesnt come close to the real cost of running a nice e90.

Fuel will be approx 15-20p mile, so anything above that contributes towards your running costs and depreciation. Anything under that is a crime

You have your calculations slighty wrong, I didnt realise until I looked into it but you pay 11% National insurance tax until you hit 40% tax bracket, then national insurance goes down to 1%, so if you mark all of the allowance at 40% tax then it will be 41% ie 6k car allowance = £354/month.

You also then ofset that against the fact that the MAR which you can claim releif against is claimed at 40% so you get more back that way, so evens itself out.

What I always think to myself is I get my car allowance, then I dont pay company car tax which I would if I took a company car, so when you add the car allowance, the tax you would have paid and MAR, as a 40% tax payer it becomes a better idea not to have a company car.

[catdog1121]

Also anyone that is self employed, if you do more than 10,000 miles, setup another subsiduary company, that also employs you, the reason for this is:

HMRC allow first 10,000 miles @ 40ppm MAR
After 10,000 miles @25ppm MAR

The loop hole is that you can claim the first 10,000 miles @ 40ppm for each company.

So if you do say 20,000 miles you get you company to pay you for 10,000 miles and the subsiduary pay you for 10,000 miles and then you can claim 20,000 miles at 40ppm MAR.

Obviously you may need to somehow slip ur buisness activity to make it legit but thats not to difficult.

I found this out when I got TUPE'd from my company to a subsiduary company, not the subsiduary has to be a completely seperate entity, but can be wholy owned by the main company.

[Ti Rich]

It's a right mine field and I just had to decide between going back into the company scheme or staying out. In the company scheme I would have a 318d, opting out I have a 330d for similar money when taking everything into account.

[NFS]

Originally Posted by m1bjr

Really?

I have a318d stop/start and its one of the most efficient out there.
I struggle to get above 60mpg on a regular basis.
If you live in say, Cumbria, then there is absolutely no way.
Factor in that some of us carry large loads (test gear circ 200KG in my case) and that number is impacted severely.

With the rate of fuel duty set to rise again very soon, 12ppm just isnt enough!

S.

It does say 60mpg in your sig though

My point is simple. I agree that fuel costs are going up. You are arguing that the HMRC mileage rates (or company reimbursement) should also go up, but that ignores advances in fuel efficiency.

When the mileage allowances were set I was driving a 320d, which returned around 40mpg. I get the same mileage allowance for the 335i, which returns 25mpg. It would also be the same for your 318d at 60mpg.

The actual numbers are going to vary dependant on the type of driving you do, but the differences will be pretty constant.

On a cost per mile basis, the effeciency benefits available today provide very significant mitigation against increases in fuel costs.

I think that the approved mileage rates are actually a relatively fair way of gently encouraging people to more efficient cars. Unlike the policy on VED which is ridiculously stupid and unfair.

[NFS]

Originally Posted by catdog1121

What I always think to myself is I get my car allowance, then I dont pay company car tax which I would if I took a company car, so when you add the car allowance, the tax you would have paid and MAR, as a 40% tax payer it becomes a better idea not to have a company car.

One of the problems with opting out is that employers have taken the opportunity to reduce their costs. As a result I have seen lots of schemes where the benefits to the employee are very marginal indeed.

[doughboy]

Originally Posted by NFS

One of the problems with opting out is that employers have taken the opportunity to reduce their costs. As a result I have seen lots of schemes where the benefits to the employee are very marginal indeed.

And of course, leased company cars come taxed, insured, serviced etc all in.

If you opt out you'll have to fund all those things yourself.

[SteveC]

Typically for 40% marginal rate tax payers, the tax on company fuel cards is higher than the actual benefit.

In my case I drive 12,000 private miles per year in a car with a CO2 calculation of 22%

My car typically returns 41mpg (14.58 km/l)

To drive 12,000kms I'll need 823 litres of diesel, which at £1.33 makes £1094,00

The tax on a fuel card for the same car is £1584 for 2010 and £1656 for 2011

The British tax system must be one of the few where a tax rate of 151% on certain benefits is acceptable

The 3 ways the improve the situation are:

Drive a smaller car with less CO2
Drive MORE private miles
Earn less

As I've stated in previous messages, the British tax system is essentially set up to create more poor people, who depend on the Government for handouts and therefore elect the Government with the most generous handout manifesto.

Given that the British electorate don't care if a tax is unfare, as long as they're not penalized you have a system that penalizes success and compensates poor performance.

On the other hand, if you're reasonably wealthy, smart, take a long term view and the time to know all there is to know about tax allowances, you can live pretty well, with tax free income in the £100,000s. The point is, you need wealth to create tax-free income.
So, the people who really get penalized in Britain are the majority, who should earn enough to live well but don't because they're taxed to death in order for the Government to fund the ridiculous benefits that the British population is now addicted to.

In Britain the Government taxes us £1000 in order to give us £300 in benefits. The £700 goes to collection and enforcement of the tax and the costs of handing out and controlling the benefit.

[catdog1121]

Totally agree with the tax, does seem the more I earn the less tax I pay.

As for the company cars coming serviced, road taxed etc, thats why you go for a personal lease fully maintained, pays for everything including tyres etc, just not insurance.