Company car verses opting out allowance.

Oddsocks

Ryder Cup Winner
Joined
Jun 20, 2010
Messages
16,976
Location
Croydon, Surrey
Visit site
I’m interested to hear peoples opinions and advice on opting out verses with an allowance verses sticking with the conversion company car offering.

I’m currently getting nothing short of raped on BIK tax on the current car but we are looking shortly to transfer to a fleet of hybrids, the issue being that they are smallish hybrids which are still going to see a BIK tax hit of £220 a month ish. Being a smaller hybrid they are not best suited for my personal life and when I’ve asked about potentially choosing a larger hybrid car within the same budget it’s been shot down as they want to keep a standard fleet, this is strange giving my proposed choice being a cheaper option in both leasing and BIK TAX.

anyway, moving on the allowance would nett down to an additional £300 tax home plus the saving of £220 so an approx budget of £500 a month. I will do on average 15,000 - 20,000 a year in business miles but as all of this is claimable the choice of ICE over EV isn’t really a debate with current energy costs.

My initial thoughts are a diesel with approx 55mpg for three years on a PCP and then moving to full EV once this energy crisis is over. I’ve only looked at diesel more for the cost per mile (£0.15) verses petrol (£0.19) , has anyone done similar recently and are there any things I need to be aware of other than claimable mileage rates?

it appears that depending on car allowances it depends what companies opt to repay and then there is always the assessment to reclaim any differences.

Thanks in advance for any advice.
 

Rooter

Money List Winner
Joined
Jan 30, 2012
Messages
10,807
Location
Newbury
Visit site
I always opt'd out if I could and got a PCP on a nearly new. Way better off in my pocket.

Don't buy an EV either, they are a short-term sticking plaster. Go efficient petrol (ie small engined turbo).
 

GreiginFife

Money List Winner
Joined
Mar 7, 2012
Messages
10,747
Location
Dunfermline, Fife
Visit site
As Rooter, I'd take the allowance and then you have a wider choice of what you want rather than what is offered.

Only thing with PCP's is that most advertised monthly rates are based on ridiculously low mileage (8,000 usually) and depending on the dealer/finance provider it can become quite costly. BMW Finance is around £20 per month for every 2000 additional miles.

My mate has a Q5 through Audi finance and he was quoted £550 per month based on 8000 miles, he needed 20,000 and ended up paying £690 per month o_O
 

Oddsocks

Ryder Cup Winner
Joined
Jun 20, 2010
Messages
16,976
Location
Croydon, Surrey
Visit site
I’m fortunate to have links within Audi so have a good range of sub 10k miles used vehicles on pcp plans allowing for 15-20k annual mileage. The only downside is a long travel to collect the car

It currently works out that the BIK Tax savings along with additional allowance will only see the car I want costing the same, the only incurred costs will be services , repairs and road tax.

Is there assured mileage rates that a company has to pay as I couldn’t find nothing on HMRC. I only ask as the misses gets 25ppm for the first 10k then it reduces and she has to do the hmrc claim form, but her allowance is only £4k, our company seems to offer a higher allowance but I wasn’t sure if this is so they can pay a lower mileage rate.

Thanks for the help guys
 

PNWokingham

Journeyman Pro
Joined
Jun 20, 2010
Messages
3,534
Location
Berks
Visit site
I’m interested to hear peoples opinions and advice on opting out verses with an allowance verses sticking with the conversion company car offering.

I’m currently getting nothing short of raped on BIK tax on the current car but we are looking shortly to transfer to a fleet of hybrids, the issue being that they are smallish hybrids which are still going to see a BIK tax hit of £220 a month ish. Being a smaller hybrid they are not best suited for my personal life and when I’ve asked about potentially choosing a larger hybrid car within the same budget it’s been shot down as they want to keep a standard fleet, this is strange giving my proposed choice being a cheaper option in both leasing and BIK TAX.

anyway, moving on the allowance would nett down to an additional £300 tax home plus the saving of £220 so an approx budget of £500 a month. I will do on average 15,000 - 20,000 a year in business miles but as all of this is claimable the choice of ICE over EV isn’t really a debate with current energy costs.

My initial thoughts are a diesel with approx 55mpg for three years on a PCP and then moving to full EV once this energy crisis is over. I’ve only looked at diesel more for the cost per mile (£0.15) verses petrol (£0.19) , has anyone done similar recently and are there any things I need to be aware of other than claimable mileage rates?

it appears that depending on car allowances it depends what companies opt to repay and then there is always the assessment to reclaim any differences.

Thanks in advance for any advice.

i would do exactly what you say - buy or pcp a diesel. Don't be put off by high mileage if you choose to buy - would prefer an 80 to 100k nice car 3 years old that has been fully looked after and heavily depreciated. You may even get something in the 15k to 20k (mabe even nearer 10 or 12 depending on what you want - Skoda etc) area that you could buy and would own outright from your allowance/savings in 3 years or so. Best buy i ever had was a base spec manual 2008 BMW 325D with 95,000 miles for £8k. Great car when ECU chipped to 290bhp. And traded it in 3 years and 20k later for £6.5k
 

Oddsocks

Ryder Cup Winner
Joined
Jun 20, 2010
Messages
16,976
Location
Croydon, Surrey
Visit site
I think we have certain criteria (must be less than 3 years old when purchased and replaced at 6 years)

It’s the mileage rates I really need help on as any addditional gain here would cover servicing/ unforeseen expenses
 

GreiginFife

Money List Winner
Joined
Mar 7, 2012
Messages
10,747
Location
Dunfermline, Fife
Visit site
I think we have certain criteria (must be less than 3 years old when purchased and replaced at 6 years)

It’s the mileage rates I really need help on as any addditional gain here would cover servicing/ unforeseen expenses

Are you meaning the mileage claim rates for "business travel".

I get 45p per mile up to 10,000 miles and then 25ppm thereafter.
 
Top