Company Car allowance

[paddy 17]

guys can you help please..... i have a company car at the moment, work are thinking about changing it and giving us a car allowance???? whats the pros and cons co i aint got a bloody clue lol

 

 

thanks

[3bitbob 0]

I get a car allowance from my company (ECO Car Scheme)

Basically they give me a set allowance every month (adjusted against tax) however much the car costs me or is worth.

Its just got to be road legal / MOT and have my own personal business insurance.

40p per mile for the first couple of thousand as its my private car too.

 

Works out better for me than a company car.

[paddy 17]

so its a set amount in your wage?? so if its £350 thats to cover service/tyres/tax etc? so its worth getting one on a private lease scheme?

[JawD 99]

I offer it for my employees.

 

We pay them £400pm. £0.40/m <10,000 mile then £0.25/m >10,000 mile April ~ March.

 

For £350 they have to cover everything. Tax, MOT, Insurance, servicing etc.

 

What they don't get is taxed on their income for having a benefit in kind (Car).

 

A rule of thumb is usually if you do high mileage its worth it but if you dont do much mileage its not.

 

Dont ask me when mileage becomes high

 

Also be aware that to run these schemes you have to have good record keeping of your journeys each day. Also you can't claim from home to work and back again if you have a fixed place of work.

 

Leases are ok, but you might get tied into a 3 year deal. Depends on the kind of car you want really. can be cheaper picking up a 1yr old motor with a bank loan.

 

Edit - Oh, and despite the rise in fuel costs, the mileage rate has never changed in years (it is meant to cover mileage and wear and tear)

Edited January 26, 2010 by JawD