Company Car or Opt Out?

[si_hill]

I have been offered the option of a company car or to opt out and receive a car allowance. Has anyone got any experience of this and what decision did you take?

It seems like a bit of minefield (probably why I have avoided until now).

Does anyone run a S or RS as a company vehicle?

[graemep]

I opted out when I was offered the option, as none of the cars (on an extensive list) was anything I would consider personally and at the time my S3 was in the region of 3-4 years old with low mileage.

I ended up buying a b5 RS4 a couple of years ago, and use both that and the S3 for company mileage although this is fairly limited and expensed - its just insurance cover I have to consider at renewal time. However, if I was doing higher mileages I would reconsider my options.

[PhilT]

I have always taken the car allowance. Best part is that I put all my private fuel on my fuel card and expense when the fuel card is not accepted. Handy when you use 400 litres during a visit to the Ring

[si_hill]

I will be looking at around 10K business miles per annum and 7K private miles. If I opt out the car has to be under 2 years old when purchased and can be kept until a maximum age of 6 years.

I was looking into the possibility of taking out a PCP for a new car although I cannot decide whether to get a diesel or pay the extra and get something a bit special to compensate the fact that I will probably have to sell my B5 S4.

[Jarv]

Take fuel cost out of the equation and the 6 starts to make a lot of sense! You lucky man Phil.

[Dom81]

I ran an S4 on the company, but opted out to buy the RS4 myself

You pay a crippling amount of tax due to high emissions and it's getting worse. Company schemes can still work for some (I've just taken delivery of a Pruis for the family, and the tax is virtually zero) but for the guzzlers you're better to go it alone - in spite of insurance, depreciation, running costs etc. I'm £10k net better off a year (over a 4 year contract) running a £22k Prius rather than a £40k (from memory) S4 - obviously two absolute extremes, but tax is a bigger part of the saving than lease cost

[Marlon]

An accountant friend of mine as always said that a company car is not worth having unless your doing over 30K business miles per year, obviously generic assumptions would be made to back this statement up ie maintenance costs/tyres/tax/amount of car allowance etc

As i look out of the office window in to the car park, i see an array of my colleagues company cars mainly audi A3 & golf 2.0 TDI's - Oh and there's my RS4 amongst them all.....I definitely know which I'd rather have!!!

[si_hill]

An accountant friend of mine as always said that a company car is not worth having unless your doing over 30K business miles per year, obviously generic assumptions would be made to back this statement up ie maintenance costs/tyres/tax/amount of car allowance etc

As i look out of the office window in to the car park, i see an array of my colleagues company cars mainly audi A3 & golf 2.0 TDI's - Oh and there's my RS4 amongst them all.....I definitely know which I'd rather have!!!

So does your company pay you a car allowance and let you run a 8 year old RS4 or do you not have to use your car for business?

As I only anticipate doing approximately 10k business miles a year my calculations lead me to believe that opting out is the better option. Now I just have to decide whether I go for HP, PCP or a personal loan to finance the car and what car and whether the S4 stays or goes

[GrahamS4]

Technically, my nearly 10 year old S4 is my company car. Many companies have stricter rules on maximum age. I have to insure for business use the only real stipulation.

[Marlon]

An accountant friend of mine as always said that a company car is not worth having unless your doing over 30K business miles per year, obviously generic assumptions would be made to back this statement up ie maintenance costs/tyres/tax/amount of car allowance etc

As i look out of the office window in to the car park, i see an array of my colleagues company cars mainly audi A3 & golf 2.0 TDI's - Oh and there's my RS4 amongst them all.....I definitely know which I'd rather have!!!

So does your company pay you a car allowance and let you run a 8 year old RS4 or do you not have to use your car for business?

As I only anticipate doing approximately 10k business miles a year my calculations lead me to believe that opting out is the better option. Now I just have to decide whether I go for HP, PCP or a personal loan to finance the car and what car and whether the S4 stays or goes

Basically yes, I can run what i want with the car allowance, I do around £7k business miles a year....

I must admit however i'am contributing some of my salary on top of the allowance to cover the cost of the RS4, and it can be hard for the company mileage rate to cover fuel bills for business trips, however this for me is made up in the driving of the thing...

[derdle]

Not used this myself but may help you....
http://www.cashorcar.co.uk/

[SteveH]

Totally agree with marlon, unless your doing considerable mileage its allowance every-time. You do need to consider how fuel is covered, lump sum or rate per mile and how that lies with additional rebates available from tax man using their AMAP rates (40p per mile for first 10,000 miles; 25p thereafter). e.g. your allowance is salaried and PAYE, fuel is recompensed by work at 20p per mile, so you can claim 20p rebate from your income tax rate for each of your 10,000 miles.

I opted out of company car scheme in 2002 and its amazing the tax I've saved in that time; particularly if you can claim a number of business journeys and/or your journeys to work as business mileage (i.e. a temporary place of work, less than 2-years at that location).

Under quite stringent rules on cars at my place, I've managed to push the boundaries with the RS6 for three years, with many ford mundanes in the company car park.

[si_hill]

Totally agree with marlon, unless your doing considerable mileage its allowance every-time. You do need to consider how fuel is covered, lump sum or rate per mile and how that lies with additional rebates available from tax man using their AMAP rates (40p per mile for first 10,000 miles; 25p thereafter). e.g. your allowance is salaried and PAYE, fuel is recompensed by work at 20p per mile, so you can claim 20p rebate from your income tax rate for each of your 10,000 miles.

I opted out of company car scheme in 2002 and its amazing the tax I've saved in that time; particularly if you can claim a number of business journeys and/or your journeys to work as business mileage (i.e. a temporary place of work, less than 2-years at that location).

Under quite stringent rules on cars at my place, I've managed to push the boundaries with the RS6 for three years, with many ford mundanes in the company car park.

Thanks for your input, good to hear that you are able to run the RS6 under your scheme. My business mileage would be rate per mile of 17p so I understand I can get tax relief on the 23p x 10000 = £2300 for the first 10,000 business miles.

The only disadvantage I can see of our opt out scheme is that I am expected to pay the employers NI contribution on my annual gross allowance on top of my PAYE.

If I could run a RS6 on my scheme I would be well chuffed but I am not sure it is affordable.

Steve - how many business miles are you doing annually?

[GrahamS4]

... rate per mile and how that lies with additional rebates available from tax man using their AMAP rates (40p per mile for first 10,000 miles; 25p thereafter). e.g. your allowance is salaried and PAYE, fuel is recompensed by work at 20p per mile, so you can claim 20p rebate from your income tax rate for each of your 10,000 miles.

How do you go about claiming these rebates?

I do very very few business miles but only get 19p a mile. My suggestion of an extra 10ppm per turbo fell on deaf ears.

[Dom81]

This is the link to the Inland Revenue factsheet

http://www.hmrc.gov.uk/mileage/employee-factsheet.htm