Company car - opt out?

Discussion in 'Motoring' started by itsalive, Mar 13, 2013.

  1. itsalive

    itsalive

    Joined:
    Jul 9, 2008
    Messages:
    2,290
    Products Owned:
    0
    Products Wanted:
    0
    Trophy Points:
    48
    Location:
    Wiltshire
    Ratings:
    +82
    Hopefully you guys can offer me some advise, I start a new job on Monday, 1 of the benefits is a company car or I can opt out and get cash instead.

    The cash equivalent according to my offer letter is £9200 pa, in terms of business use the vehicle will see very little miles as I will be based in 1 location.

    The location is a round trip of 40 miles per day, so effectively 200 miles per week

    In previous roles I have had company cars but this was more because of the business travel involved (40000 miles + per year).

    Any advice is welcomed as i have never had the opt out option before, what are the tax implications?
     
  2. eob

    eob
    Well-known Member

    Joined:
    Nov 16, 2006
    Messages:
    1,889
    Products Owned:
    0
    Products Wanted:
    0
    Trophy Points:
    86
    Ratings:
    +472
    I travel 70 miles a day and I am on my third company car.
    I calculated the figures against owning and running my own car and for me the co car is more cost effective.
    You are doing less miles than me, but my main savings are on Road Tax, Insurance, Servicing, Depreciation etc...
    The Tax is less than the finance that I was paying on my last private car and its the other things you have to think about. What happens if you pop a tyre, crack a windscreen, have a ding. I've had all three on my co cars so far.
     
  3. FZR400RRSP

    FZR400RRSP
    Banned

    Joined:
    Mar 5, 2007
    Messages:
    32,038
    Products Owned:
    1
    Products Wanted:
    0
    Trophy Points:
    166
    Location:
    Aberdeen
    Ratings:
    +10,374
    I'm looking to opt out of my company car in 5 months.
    The tax man reckons it's the equivalent of £9600 per annum in extra salary.
    I'd rather have the extra £9600 thanks.
    I'd also save around £260 per month in tax.
    The BIK/Co2 rules are forcing me into increasingly dull cars, even my mega efficient BMW has jumped up a tax band or two, and will continue to do so.:rolleyes:
    So I've had enough, I'm looking to get something mega cheap to run (C1/Aygo/Up) and enjoy the money on other things.

    I do next to zero business miles, BTW, my company car is 99% perk.
     
  4. Frostytouch

    Frostytouch
    Active Member

    Joined:
    May 6, 2008
    Messages:
    380
    Products Owned:
    0
    Products Wanted:
    0
    Trophy Points:
    43
    Ratings:
    +127
    You've got a 320ED?

    You've got free private fuel I think from your previous posts?

    How much of your £9600 is car BIK, how much is free fuel?
     
  5. FZR400RRSP

    FZR400RRSP
    Banned

    Joined:
    Mar 5, 2007
    Messages:
    32,038
    Products Owned:
    1
    Products Wanted:
    0
    Trophy Points:
    166
    Location:
    Aberdeen
    Ratings:
    +10,374
    Fuel is £20200 x 16% = £ 3232 BIK
    £3232 x 40% = £ 1292.80 a year
    Which is £ 107.73 a month.
    Given that its very good on fuel, very doubtful I actually use £107 worth of fuel a month.
     
  6. Frostytouch

    Frostytouch
    Active Member

    Joined:
    May 6, 2008
    Messages:
    380
    Products Owned:
    0
    Products Wanted:
    0
    Trophy Points:
    43
    Ratings:
    +127
    How do you get to £9600 BIK then based on 16%, you'd need a p11d price of almost £40k?

    Only asking as £9600 is a big number on a very low emission car.
     
  7. FZR400RRSP

    FZR400RRSP
    Banned

    Joined:
    Mar 5, 2007
    Messages:
    32,038
    Products Owned:
    1
    Products Wanted:
    0
    Trophy Points:
    166
    Location:
    Aberdeen
    Ratings:
    +10,374
    Probably more like £8700, given that I spec'd the car to the hilt and it ended up just under £34k.
    £9600 or £8700, it's still 9 grand a year I'd rather have, especially when I'm being 'forced' into increasingly dull cars to keep the tax down.
     
  8. Frostytouch

    Frostytouch
    Active Member

    Joined:
    May 6, 2008
    Messages:
    380
    Products Owned:
    0
    Products Wanted:
    0
    Trophy Points:
    43
    Ratings:
    +127
    Agree too much tax is actually working against the alleged plan to reduce emissions. 320ed is a great car all round and not a high emitter of CO2 yet the Treasury keep on squeezing the BIK bands down.

    All they're doing is forcing people out of the company car and into higher emission opt out cars (IMHO)' I know they gain extra duty and VAT on the fuel spend but I think they've gone too far with squeezing the company car drivers now.
     
  9. KelvinS1965

    KelvinS1965
    Distinguished Member

    Joined:
    Jan 3, 2006
    Messages:
    17,062
    Products Owned:
    1
    Products Wanted:
    1
    Trophy Points:
    166
    Ratings:
    +7,991
    This is why I don't bother with a fuel card: I just claim 15p mile for business mileage. I don't find it any more work, but it means I have to pay in advance for the fuel, but my firm is quick paying expenses so I already have the money in my account before the CC bill is paid. At current fuel prices I just need to clear 43 mpg and I average nearer 47mpg. I drive my Z3 or my OH drives in her car at the weekend, so no benefit having 'free' fuel for me.

    I can't remember what it worked out per month,but at a similar P11D value to yours but higher emissions (320d Touring non 'ED' of course) at 40% I think it worked out like a 1.5 tanks worth of fuel which is over 1000 miles a month of private driving to 'break even'.

    Having just taxed and insured my Z3, plus I'm looking at two new tyres soon it reminds me of the 'hidden' benefits of a company car...
     
  10. FZR400RRSP

    FZR400RRSP
    Banned

    Joined:
    Mar 5, 2007
    Messages:
    32,038
    Products Owned:
    1
    Products Wanted:
    0
    Trophy Points:
    166
    Location:
    Aberdeen
    Ratings:
    +10,374
    Given that company cars account for the huge majority of new car sales, forcing people out of them is an odd one.
    It's not as if those leaving will automatically go buy another new car.
    Some will, many will find alternatives (public transport or a used car).

    You're right, BTW, the 320ED is a fine car.
    But even it is being squeezed (now at 16% BIK)
    I really wouldn't want to go any 'duller'.
     
  11. deantown

    deantown
    Distinguished Member

    Joined:
    May 14, 2007
    Messages:
    3,163
    Products Owned:
    0
    Products Wanted:
    0
    Trophy Points:
    166
    Location:
    watford
    Ratings:
    +2,285
    Would that be a C1,Aygo or an UP. :D
     
  12. FZR400RRSP

    FZR400RRSP
    Banned

    Joined:
    Mar 5, 2007
    Messages:
    32,038
    Products Owned:
    1
    Products Wanted:
    0
    Trophy Points:
    166
    Location:
    Aberdeen
    Ratings:
    +10,374
    I don't see them as dull, they are what they are.
    Cheap, cheerful, honest.
    And fun.

    What I hate is being forced into low co2 versions of executive cars.
    Much as my 320ed is a fine car, it looks crap on its tiny wheels.
    The low co2 Audi A4 is equally dull.
     
  13. eob

    eob
    Well-known Member

    Joined:
    Nov 16, 2006
    Messages:
    1,889
    Products Owned:
    0
    Products Wanted:
    0
    Trophy Points:
    86
    Ratings:
    +472
    My MD is a bit of a petrol head and he said that if I got a 520ed he would change the wheels for something better than the low resistance donuts.
    I opted for the A4 Black. because there are already too many 320ed s in the car park. I think he gets a really good deal from a main dealer in Glasgow.

    This will probably be my last decent Co car, although the tax was better than my VW CC, I got stung with the MPG, its pants.
     
  14. FZR400RRSP

    FZR400RRSP
    Banned

    Joined:
    Mar 5, 2007
    Messages:
    32,038
    Products Owned:
    1
    Products Wanted:
    0
    Trophy Points:
    166
    Location:
    Aberdeen
    Ratings:
    +10,374
    Not sure how changing the wheels would work on the 320ED as the ride height is 10mm lower than a normal 320.
    Looks aside, I enjoy the fact I can hit potholes with impunity on small wheels with balloon tyres.
    Three years of no alloy damage!
     
  15. Frostytouch

    Frostytouch
    Active Member

    Joined:
    May 6, 2008
    Messages:
    380
    Products Owned:
    0
    Products Wanted:
    0
    Trophy Points:
    43
    Ratings:
    +127
    If you go up on the wheel rim, can't you then lower the tyre profile to keep the same circumference?

    But then you'd have poor ride quality?

    I dunno
     
  16. lmccauley

    lmccauley
    Well-known Member

    Joined:
    Oct 24, 2000
    Messages:
    3,645
    Products Owned:
    0
    Products Wanted:
    0
    Trophy Points:
    106
    Location:
    Newcastle
    Ratings:
    +409
    But then the wheel (including tyre) will still look tiny in the wheel arch.
     
  17. Frostytouch

    Frostytouch
    Active Member

    Joined:
    May 6, 2008
    Messages:
    380
    Products Owned:
    0
    Products Wanted:
    0
    Trophy Points:
    43
    Ratings:
    +127
    Not with the lowered ride height on the 320ED?
     
  18. KelvinS1965

    KelvinS1965
    Distinguished Member

    Joined:
    Jan 3, 2006
    Messages:
    17,062
    Products Owned:
    1
    Products Wanted:
    1
    Trophy Points:
    166
    Ratings:
    +7,991
    The 'ordinary' 320d SE has 17" alloys (can't remember the tyre size off hand) which fill the arches a bit better, though not as well as my colleague's M sport version with 18" alloys.

    I've not had a problem with potholes myself (tempting fate now :eek:) though I did hit a scaffold 'joint' on a motorway a while ago at 70mph. The run flats did their job as both my front and rear offside tyres hit the joint, though only the rear tyre was damaged somehow. Pulled over to the hard shoulder without issue and then drove (slowly of course) to the nearest tyre depot to have it replaced since it had a big hole in the side.

    I can't remember what the tax charge is per month for my 320d Touring, but maybe around £160 @ 40%. There is no way I could run a car and change it every three years for anything close to that figure so I can't grumble. My Z3 3.0 costs £50 per month just for tax, insurance and annual MOT (I do my own servicing) without driving it anywhere. I need a couple of tyres soon which will be £200+ of course it didn't cost me a penny for the blow out mentioned above.

    IMVHO while I don't want to encourage the Government to further increase CC tax, I don't think it's too bad at the moment. Certainly not enough to make me chose a really dull car just to save a bit more tax: In any case I have to chose an estate car as company policy for all Engineers, so there is a limit to how small I could go anyway. Maybe I could chose something really low powered and smaller and then only pay £100 per month, but I'd rather pay the extra £60 than drive something that I'd hate.

    I know it's a different matter if you get an increased salary if you opt out, but it's the servicing and unforeseen issues like the blowout I had that could catch you out, so probably realistic to allow for some contingency if going this route. Also if you make a claim on your car insurance then your premium will of course go up, which doesn't happen with a company car since you don't pay for it. The more miles you do for work, the higher the chance of making a claim too...
     
    Last edited: Mar 16, 2013
  19. eob

    eob
    Well-known Member

    Joined:
    Nov 16, 2006
    Messages:
    1,889
    Products Owned:
    0
    Products Wanted:
    0
    Trophy Points:
    86
    Ratings:
    +472
    I briefly, and very half heartily, looked at the Citroen DS5 diesel hybrid before I chose the Audi.

    Great technology and hopefully it will advance further in the next three years. A diesel range extender, like the Vauxhall Amperage, would certainly get my interest.
     
  20. FZR400RRSP

    FZR400RRSP
    Banned

    Joined:
    Mar 5, 2007
    Messages:
    32,038
    Products Owned:
    1
    Products Wanted:
    0
    Trophy Points:
    166
    Location:
    Aberdeen
    Ratings:
    +10,374
    I was looking at the new Volvo estate diesel hybrid, only 5% BIK.
    Unfortunately, the lease figures are horrendous.
    It is a £48k car after all, with currently unpredictable residuals.
     
  21. KelvinS1965

    KelvinS1965
    Distinguished Member

    Joined:
    Jan 3, 2006
    Messages:
    17,062
    Products Owned:
    1
    Products Wanted:
    1
    Trophy Points:
    166
    Ratings:
    +7,991
    Out of interest, what does that work out as a monthly tax bill at 40%? Likely to be well out of budget for me anyway as our limit is based on lease cost not list price, but just interested how much the saving is verses driving something (IMHO) less dull.
     
  22. FZR400RRSP

    FZR400RRSP
    Banned

    Joined:
    Mar 5, 2007
    Messages:
    32,038
    Products Owned:
    1
    Products Wanted:
    0
    Trophy Points:
    166
    Location:
    Aberdeen
    Ratings:
    +10,374
    Around £80 per month.
    If you get free fuel, as I do, big savings there.
    Around £34 per month instead of £107 for my 320ed.
    The Volvo sounds pretty exciting really, in a practical kind of way.
    4wd if you use the engine and electric motor together, and 0-60 in 6 seconds.
     
  23. KelvinS1965

    KelvinS1965
    Distinguished Member

    Joined:
    Jan 3, 2006
    Messages:
    17,062
    Products Owned:
    1
    Products Wanted:
    1
    Trophy Points:
    166
    Ratings:
    +7,991
    That's pretty low (though I'd still struggle to 'own' a Volvo however irrational it might seem). I don't bother with 'free' fuel (we can opt to have a fuel card if we want to) since it would be more than your current per month and I barely do any private mileage in the 320d.

    TBH unless it isn't permitted in your firm for some reason, you'd be much better off not having 'free' fuel anyway. I find that above 43 mpg (@15p mile) I'm in pocket so the small amount of private mileage I do is covered anyway, plus I'm over £109 per month better off tax wise. I seem to remember that yours is more a perk car too, so I imagine low business miles anyway.

    That extra £109 per month would allow you to chose a much more exciting car anyway. :smashin:
     
  24. sdb123

    sdb123
    Distinguished Member

    Joined:
    May 17, 2005
    Messages:
    18,181
    Products Owned:
    2
    Products Wanted:
    0
    Trophy Points:
    166
    Location:
    Rushden, Northants
    Ratings:
    +2,252
    Interesting points raised on the latest hybrids and reduced BIK. I'm due to place an order for my next car by the end of March and feel that I'm being shunted down the path of the German marques with the leasing costs. A real shame as from a company driver perspective, as the reduced BIK makes an awful lot of sense.
     

Share This Page

Loading...