Company cars and BIK

[walkerwek1958]

Following my comments on another thread (BMW 330e)I`ve decided to post this separately. I claimed that company car drivers shouldn't moan about BIK because basically they were getting their cars for nowt. It's no surprise that a few feathers were ruffled by this, fuelled by a couple of tongue in cheek flippant comments I made that clearly tested the sense of humour of some folks. Anyhow, here's my reply:

OK guys, you're not getting your cars for nowt, but you're getting 'em on the cheap, there's no denying that fact.

Do the maths: Typical Beemer/Audi/Jag £35000 car loses around 50% of it's value in 3 yrs. It costs around £1200-£1500 to insure over that period. It costs £300-£600 road tax over the same period. It costs around £1800 in servicing, brakes, and tyres....probably more if you do plenty of miles.

If you buy the car you've spent over £21000 in depreciation and running costs over the three years excluding fuel. That's £583/month and it's money you've already paid tax on!

Factor in the money you could be making if you'd invested your £35K at 3.5% and that's another £100/month it's costing. Alternatively factor in the interest on borrowing the money. PCP might be slightly kinder but you can`t escape the fact that a £35K car loses £17.5K over 3 years, and there's only one person paying for that........it's factored into the figures somewhere, trust me.

My numbers won`t be exactly right but they won't be far wrong. Now look at your BIK tax payments and try convincing me you're not getting these cars on the cheap! A 40% taxpayer would need £11,660 of his salary to run the car in my hypothetical case, for most people that's a lot of money.

Cars are expensive items, make no mistake, and the big D (depreciation) is the killer. Being offered a company car gives many people chance to run a nice motor that they otherwise wouldn`t (or couldn`t) fork the money out for, so why worry about the odd £100/month when you're already saving several £100s/month by not funding the car yourself!

As for the hybrid/electric cars, under the current car taxation rules they will appeal to a lot of company car drivers. Whether the savings are justified (compared to a conventional car) is open to debate and the only way to find out is to live with one. As most journeys involve a high proportion of slow moving/stop-start driving I guess it doesn`t matter what's under the bonnet, I`d be more interested in the quality of the music system.

Once again the tail's wagging the dog and government taxation policy is influencing car development. Last time this happened we ended up with the predominance of diesel engines which has subsequently been seen as a bad move.........time will tell whether the latest sea-change will prove to be a blessing. The root of the problem still remains: too many cars on the road at the same time. Subsidising people to own company vehicles won`t help that, cutting down on unnecessary travelling will, and that's the carrot that needs to be dangled. If the carrot doesn`t work, out comes the big stick!

Paul

[zelig]

I stand by what I said before... whilst you may have a point, it irks to pay BIK tax on what is essentially a business tool.

I need a car to do the job I am employed to do - rentals are not an option, practically, nor economically.
My example is not unique - I work from home - I have no commuting miles, only private miles are at weekends where I rack up about 20 miles on average.
So over 95% of my 25,000 miles p.a. are business related - yet I have to pay over £250/month for the privilege of having a company car.

I like my car - I chose it - as I decided (& I agree with you here ) ~£250/month is not a lot to pay to have a brand new Jag on the drive,
Sure, I could have chosen a cheaper alternative - to minimise the BIK & be miserable every time I drive 500 miles in an anonymous, functional, noisy little box.
...but I decided that given I spend so much time in it, I would consider it to be the perk the government deemed it to be.

Therefore, I decided to maximise my enjoyment & be able to enjoy my surroundings if I'm to spend many hours & many miles sitting in it...
(always with an eye on the BIK - so I didn't go mad and get a gas guzzler)

But - I still pay £250/month plus private fuel for the 80-100 miles a month I do - that does not make it cheap motoring (per mile)

Given the option to reduce BIK - most people will give hybrids and other technologies serious consideration. Why wouldn't you ?
Especially as the new hybrids offer serious performance & luxury with big reductions in BIK. As others have said - it’s a no brainer.

When I chose mine in Dec 15 - there wasn't a viable (affordable) hybrid in this sector - so I picked one of the lower emission cars
The Jag as it was newer (& more lightweight) model than the 5 series and the E Class - so had better figures to reduce my BIK.

You are right - myopic government policies had made this situation what it is - but most people don't like wasting money on something they have to have for work.
It's just common sense...

IMHO

z

[andy armitage]

I stand by what I said before... whilst you may have a point, it irks to pay BIK tax on what is essentially a business tool.

I need a car to do the job I am employed to do - rentals are not an option, practically, nor economically.
My example is not unique - I work from home - I have no commuting miles, only private miles are at weekends where I rack up about 20 miles on average.
So over 95% of my 25,000 miles p.a. are business related - yet I have to pay over £250/month for the privilege of having a company car.

I like my car - I chose it - as I decided (& I agree with you here ) ~£250/month is not a lot to pay to have a brand new Jag on the drive,
Sure, I could have chosen a cheaper alternative - to minimise the BIK & be miserable every time I drive 500 miles in an anonymous, functional, noisy little box.
...but I decided that given I spend so much time in it, I would consider it to be the perk the government deemed it to be.

Therefore, I decided to maximise my enjoyment & be able to enjoy my surroundings if I'm to spend many hours & many miles sitting in it...
(always with an eye on the BIK - so I didn't go mad and get a gas guzzler)

But - I still pay £250/month plus private fuel for the 80-100 miles a month I do - that does not make it cheap motoring (per mile)

Given the option to reduce BIK - most people will give hybrids and other technologies serious consideration. Why wouldn't you ?
Especially as the new hybrids offer serious performance & luxury with big reductions in BIK. As others have said - it’s a no brainer.

When I chose mine in Dec 15 - there wasn't a viable (affordable) hybrid in this sector - so I picked one of the lower emission cars
The Jag as it was newer (& more lightweight) model than the 5 series and the E Class - so had better figures to reduce my BIK.

You are right - myopic government policies had made this situation what it is - but most people don't like wasting money on something they have to have for work.
It's just common sense...

IMHO

z

I feel the same as I pay a lot more tax for having the company car and I don't do any private mileage at all so it really bothers me that it is classed as a benefit when all it is used for is work!

[walkerwek1958]

I`m guessing the two previous comments are the exception to the rule; anyone who genuinely wouldn`t chose to have the car at all and does no private mileage will understandably feel aggrieved because the company car is literally a tool of the trade and nothing more.

[andy armitage]

I`m guessing the two previous comments are the exception to the rule; anyone who genuinely wouldn`t chose to have the car at all and does no private mileage will understandably feel aggrieved because the company car is literally a tool of the trade and nothing more.

Exactly right Paul I am a sales rep and do around 30,000 miles a year all business only as I use our own car at weekends and never use the company car for private miles so I do feel aggrieved!

My next car needs ordering around September so to get that BIK down I will be looking at hybrid or even electric but I fear the electric won't have the range but I need to pay less tax each month as it bugs the life out of me!

[Gullers]

^^ as above I echo the other points made. My mileage is 75%+ business and I own another car which I often use at weekends.
How is it fair to be paying £3.5k pa in tax.
The benefit should arguably be linked to private mileage which would be fairer as your getting more use.

I’m not sure I agree with the figures above. In 2 years and 30k miles my last BM 320 had no tyres and one service for £149. Admittedly the depreciation is high but in truth if I opted out I wouldn’t go for a new car or if I did I’d do a PCH.


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[danmiddle2]

Hi Paul,

I must respectfully disagree with your conclusion. Company cars are not a cheap way of owning a car (although a lot will depend on the scheme).

For example, I have an option for a company car or I can take an equivalent cash alternative 'car allowance'. I take the allowance for the simple reason that it doesn't make financial sense to get a car through the scheme. The fact is that I can get an equivalent car at a better deal by leasing it privately than I can get through the company scheme. Therefore, in my case, the company car is not a way of getting a car "on the cheap".

The only way I compare prices is by comparing the total money that has been taken out of my pocket each month in both scenario's. Private leasing is simply cheaper (all things factored in), and yes, I am talking about a lease that covers servicing / tyres / equivalent mileage etc.

That said, I also do not lease privately :-)

Instead, I drive a 250k mile Volvo XC90 that is over a decade old! It does me just fine.

It had already lost most of it's original cost when I purchased it and would be worth more in parts than the car as a whole... it is reasonably economical (for its class), completely reliable (touch wood) and suits my needs just fine.

It cost me the equivalent of 4 months leasing costs and I have already had it for 2.5 years. Now that is cheap motoring, even when you factor in servicing / tyres etc. If it fails tomorrow, I have certainly had my moneys worth and would get another.

[Chris_in_the_UK]

Paul - it's benefit that attracts people to the job. HMRC don't like the fact that the employee gets a provided/subsidised car so they tray and recoup some dues in the form of BIK.

Some additional stuff for you to froth over.

Some manufacturers discount the lease market to the tune of 40% to move volume - this, added to the fact that the lease companies are a 'trade to trade' situation.

Colleagues of mine enjoyed some amazing deals on the Evoque when it was launched as LR had a big push to get it out into the public eye across the blue light services. The end user paid a low lease fee but HMRC taxed them at the list price of the car for BIK purposes.

You are getting annoyed over things that do not matter in the chain - the vehicle cost is factored into the lease deal (manufacturer makes money). The servicing and tyres are factored in (serving dealer and tyre supplier make money) The residual value of the vehicle is factored into the deal (lease company make money) Vehicle is punted back into the trade or auction (both are money makers).

The only person who pays out is the end user via BIK.

[Tahiti]

I'm no expert on company cars but doesn't "You’ll pay tax if you or your family use a company car privately, including for commuting." imply that there should be no BIK tax due if it's entirely for business use?

https://www.gov.uk/tax-company-benef...n-company-cars

[andy armitage]

I'm no expert on company cars but doesn't "You’ll pay tax if you or your family use a company car privately, including for commuting." imply that there should be no BIK tax due if it's entirely for business use?

https://www.gov.uk/tax-company-benef...n-company-cars

The annoying thing is that it is classed as a benefit even if like myself it is never used for private mileage but becaue it is there for you if you want to use it privately then you have to pay the same tax as someone who uses it for private miles.

[Utred]

I'm pretty sure there are options so that if you don't use it privately, you aren't liable for BIK. I've done both and car allowance is good if you are a low.kileage user, but high mileage pushes the cost of a private lease through the roof.
I'm actually thinking of going for a cheap xc90 as an alternative to having something new and expensive....

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[andy armitage]

I'm pretty sure there are options so that if you don't use it privately, you aren't liable for BIK. I've done both and car allowance is good if you are a low.kileage user, but high mileage pushes the cost of a private lease through the roof.
I'm actually thinking of going for a cheap xc90 as an alternative to having something new and expensive....

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I don't that's the case as my understanding is that the car is there if you want to use it for private miles and for that reason they class it as a benefit!

[Tahiti]

Just done a quick Google...

"Cars available for business journeys only
Business journeys are either:

• journeys that are part of your employee’s duties, eg a service engineer travelling to an appointment
• journeys an employee has to make to get to a temporary workplace

To be exempt, you must tell your employee not to use the vehicle for private journeys and check that they don’t."


https://www.gov.uk/expenses-and-bene...s/whats-exempt

Best of luck...

[andy armitage]

Just done a quick Google...

"Cars available for business journeys only
Business journeys are either:

• journeys that are part of your employee’s duties, eg a service engineer travelling to an appointment
• journeys an employee has to make to get to a temporary workplace

To be exempt, you must tell your employee not to use the vehicle for private journeys and check that they don’t."


https://www.gov.uk/expenses-and-bene...s/whats-exempt

Best of luck...

Thanks mate I will ring the finance director tomorrow and see what he says, I will keep you posted but I have no doubt the government will have a way around it!

[danmiddle2]

Unsure if this will help, but my company's car scheme has two types... "needs drivers" and "perk drivers".

"Needs" drivers are issued a car and do not incur additional tax etc, and it's all handled differently to "perk" drivers.

"Needs" drivers also do not get to choose their car / extras etc and have no option to take the cash as by definition they "need" the car for their work.

Unsure how it's set up, but it is possible.

[andy armitage]

Unsure if this will help, but my company's car scheme has two types... "needs drivers" and "perk drivers".

"Needs" drivers are issued a car and do not incur additional tax etc, and it's all handled differently to "perk" drivers.

"Needs" drivers also do not get to choose their car / extras etc and have no option to take the cash as by definition they "need" the car for their work.

Unsure how it's set up, but it is possible.

Ahh ok well I do choose my own car so if they provided one it could be a right crap machine with low power and a vile interior!!!

Maybe when I look to order a new one around August next year I need to go for a low emissions car, I am not sure on lease costs but maybe a BMW i3 with the range extender might be a good idea as you get the £4500 grant on that car but it would still cost around £32500 which is more than my £28,000 Golf GTD but with zero emissions that would help but being a rep would it be too much of a faff charging it up and would the company pay for the electric to charge it at home every night!

[PipPip]

I had the option of a perk company car in my last job where I had a 20 mile each way commute. My existing car was an old banger that had lived on the streets of Paris for nearly 4 years so was knackered. Being an accountant I did all the maths in a spreadsheet at the time. Basically I calculated that for me a company BMW i3 was roughly the same cost over 3 years as buying a nearly new 3 series. Once I factored in fuel the i3 was cheaper. For any of the petrol or diesel options the company car was not worth the cost.

[Gullers]

I had the option of a perk company car in my last job where I had a 20 mile each way commute. My existing car was an old banger that had lived on the streets of Paris for nearly 4 years so was knackered. Being an accountant I did all the maths in a spreadsheet at the time. Basically I calculated that for me a company BMW i3 was roughly the same cost over 3 years as buying a nearly new 3 series. Once I factored in fuel the i3 was cheaper. For any of the petrol or diesel options the company car was not worth the cost.

Microsoft and your spreadsheet must have been mistaken, Paul’s already explained you get a company car for “nowt” or at worst we’re getting them “on the cheap”!


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[craig1912]

Unsure if this will help, but my company's car scheme has two types... "needs drivers" and "perk drivers".

"Needs" drivers are issued a car and do not incur additional tax etc, and it's all handled differently to "perk" drivers.

"Needs" drivers also do not get to choose their car / extras etc and have no option to take the cash as by definition they "need" the car for their work.

Unsure how it's set up, but it is possible.

Many companies have “need” and “perk” drivers but if the need drivers have a vehicle available for private use then they are taxed on it.

[andy armitage]

Many companies have “need” and “perk” drivers but if the need drivers have a vehicle available for private use then they are taxed on it.

So whichever way you look at it even though I never use the company car for private mileage so long as the car is at my house then they deem it being available to me if I wanted to use it and they tax me regardless?

[walkerwek1958]

Microsoft and your spreadsheet must have been mistaken, Paul’s already explained you get a company car for “nowt” or at worst we’re getting them “on the cheap”!


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OK, let’s go nose to nose and crunch the numbers.

Ball’s in your court buddy, I’d appreciate less sarcasm and more objectivity. Your Beemer’s on the drive looking nice and flash and you’ve paid jack-shit for it. OK, it doesn’t come for free........ but what would be standing there if you didn’t get the privilege of a company car?

My argument holds water, most company car drivers get the advantage of driving (not owning) a nice car at a bargain price, I think you already know that if you’re prepared to admit it. OK, there are anomalies, we’ve had a civilised discussion on that point, but the majority of company car owners are riding in a motor they otherwise couldn’t afford to be in.

Please point out the flaw in my numbers, I still contend that you’re getting a prestige car on the cheap.

What can’t speak can't lie, lets allow the numbers to do the talking.

Paul

[Gullers]

OK, let’s go nose to nose and crunch the numbers.

Ball’s in your court buddy, I’d appreciate less sarcasm and more objectivity. Your Beemer’s on the drve looking nice and flash and you’ve paid jack-shit for it. OK, it doesn’t come for free........ but what would be standing there if you didn’t get the privilege of a company car?

Paul

Not sure of the relevance of the question but I guess if it happened tomorrow my Audi TT would come out of the garage.

If I opted out for cash then I’d either go with a new JLR product on PCH or a used BM.


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[Gullers]

If I opted out I’d get circa £300 PM after tax, based on my 320d M sport I ran until last week I’d be saving £280 PM in BIK. The £580 PM would be more than enough to finance a used car or PCH a new one and leave cash left over.


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[senwar]

My argument....

What actually is your argument and why? What are your aims with this thread and your other comments in the original thread (which were totally unnecessary)?

I genuinely don't understand what your objective was/is. You criticise people for being childish and sarcastic? Yet you appear to have a very large bee in your bonnet for some unknown reason

[Barton Red]

I’ve ran my own company for years, always annoyed me that a car would attract additional tax. If you are only using the vehicle for work you can get a van, quite a few car derived vans (mini, Land Rover, mitubushi all do two seat van versions as do many others) out there recently bought a van for my business travel (l200,I work away a lot and I love been able to chuck my bikes in the back so I can cycle while I’m away) and weekend travel is in my wife’s car - If I start using the van for significant personal travel the bik is a month, I’m on the look out for a weekend car.

Death & taxes...

[Pitch3110]

PCH?????

£65k car = £13k lease. Car allowance covers plus 45p a mile works for me and return on invested cash.

Owning a pile of depreciating plastic, rubber and metal on the drive or huge BIK is so yesterday.

Discuss

Pitch

[Barton Red]

PCH?????

£65k car = £13k lease. Car allowance covers plus 45p a mile works for me and return on invested cash.

Owning a pile of depreciating plastic, rubber and metal on the drive or huge BIK is so yesterday.

Discuss

Pitch

You make a very good point (are you my accountant:)) the 45p is only for the first 10k, then IIRC it’s 25p, if you’re getting more than £4500a year, it’s taxable

[walkerwek1958]

What actually is your argument and why? What are your aims with this thread and your other comments in the original thread (which were totally unnecessary)?

I genuinely don't understand what your objective was/is. You criticise people for being childish and sarcastic? Yet you appear to have a very large bee in your bonnet for some unknown reason

It’s simple:

People who get company cars have totally lost sight of the true running costs of the vehicle they’re getting the privilege of using. Instead of enjoying the fact that they’re getting the use of an expensive car very cheaply, a car that in many cases they couldn’t afford to buy, they choose to moan about the tax they’re paying!

Have a look at the numbers I’ve quoted, then take a deep breath..... that’s the real cost of running a nice car. When viewed in that context it makes that company car on your driveway look like a bargain, so why try to save £100/month trying to get an even better bargain!

Try walking into a car showroom and pulling £30K out of your back pocket to buy your own car........I speak from experience and that’s why I’ve no sympathy for anyone who moans about BIK.


Nice cars are expensive, think yourselves lucky someone’s picking up a substantial portion of the tab......but trust me it’s nice to OWN the car you drive rather than borrow it.

Has that answered your question?

Paul

[senwar]

It’s simple:

People who get company cars have totally lost sight of the true running costs of the vehicle they’re getting the privilege of using. Instead of enjoying the fact that they’re getting the use of an expensive car very cheaply, a car that in many cases they couldn’t afford to buy, they choose to moan about the tax they’re paying!

Have a look at the numbers I’ve quoted, then take a deep breath..... that’s the real cost of running a nice car. When viewed in that context it makes that company car on your driveway look like a bargain, so why try to save £100/month trying to get an even better bargain!

Try walking into a car showroom and pulling £30K out of your back pocket to buy your own car........I speak from experience and that’s why I’ve no sympathy for anyone who moans about BIK.


Nice cars are expensive, think yourselves lucky someone’s picking up a substantial portion of the tab......but trust me it’s nice to OWN the car you drive rather than borrow it.

Has that answered your question?

Paul

No. Not at all. I genuinely do not understand a) your stance b) why you are actually being like you are and c) just what the reason is you went off on one in the other thread THEN created this one (yes I know someone said do it, but I can't believe you actually did).

Do you think every person who has a company car hasn't had a private car before? My current company car (well, actually my first) is a significant downgrade in class of the cars I have had throughout my driving lifetime.

Your responses, whilst criticising others for being childish and sarcastic, just come across as arrogant. In fact, stating 'a car that in many cases they couldn’t afford to buy' on this forum - well, this is both unnecessary and highly unlikely. I don't get this at all on such a subject - especially given the fact the original thread was just about a particular PHEV vehicle - which you effectively went onto belittle by calling hybrid drivers beardy, sandal wearing organic eating etc. Again - no need. I didn't bite/respond to your first post on this matter in the original thread even though it actually annoyed me - but the fact you've gone on and on AND created this thread whilst putting down any reply just speaks volumes.

Oh - and for the record - I've OWNED many cars and decided to go down the cc route when I wanted to free up some additional cash to put towards a new house so decided to sell my then 13 month old car and downgrade to a company vehicle and therefore sacrificing my £6400pa car allowance. Sorry this doesn't fit your agenda of what a company car driver is.

[Pitch3110]

You make a very good point (are you my accountant:)) the 45p is only for the first 10k, then IIRC it’s 25p, if you’re getting more than £4500a year, it’s taxable

That is indeed quite correct. Sixteen and a half quid per gallon (very conservatively) used works well for me after 10k all stilll is cooler than Kooler and his gang.

Motoring will cost what ever it is even if I took a PCH out the latest Essex offering at forty quid a month.

Where’s G when we need him.

[number2]

So whichever way you look at it even though I never use the company car for private mileage so long as the car is at my house then they deem it being available to me if I wanted to use it and they tax me regardless?

This^^^^30,000 business miles per year, vs less than 100 miles per month private miles, most of us that do this kind of mileage each year don't want to go near a car at the weekend, its like sitting in your office.

[Wolfie]

I just take the cash 💰 and pay tax on it

I go on holidays instead of having the fancy motor

and (when it f’ing works) spin round in my 5 year old Touran (3 kids, 2 dogs and 1 wife)…. I don’t do many business miles though (3-4K a year) so might be a bit different if I were doing 30k a year…

[andy armitage]

This^^^^30,000 business miles per year, vs less than 100 miles per month private miles, most of us that do this kind of mileage each year don't want to go near a car at the weekend, its like sitting in your office.

You are so right about it being like sitting in your office because that's exactly how I feel about it and that's why I don't ever use it for private mileage I use our fab Yeti which is much nicer to drive than my Golf GTD.

[number2]

You are so right about it being like sitting in your office because that's exactly how I feel about it and that's why I don't ever use it for private mileage I use our fab Yeti which is much nicer to drive than my Golf GTD.

Taking this to another level, perhaps HMRC should tax peoples desks at work, after all sometimes you have lunch at your desk so it becomes a restaurant table.
I seem to recall that when BIK came in there was a sliding tax scale which was linked to how many business miles per year you did?

[BrianT]

It’s simple:

People who get company cars have totally lost sight of the true running costs of the vehicle they’re getting the privilege of using. Instead of enjoying the fact that they’re getting the use of an expensive car very cheaply, a car that in many cases they couldn’t afford to buy, they choose to moan about the tax they’re paying!

Have a look at the numbers I’ve quoted, then take a deep breath..... that’s the real cost of running a nice car. When viewed in that context it makes that company car on your driveway look like a bargain, so why try to save £100/month trying to get an even better bargain!

Try walking into a car showroom and pulling £30K out of your back pocket to buy your own car........I speak from experience and that’s why I’ve no sympathy for anyone who moans about BIK.


Nice cars are expensive, think yourselves lucky someone’s picking up a substantial portion of the tab......but trust me it’s nice to OWN the car you drive rather than borrow it.

Has that answered your question?

Paul

Totally agree.

Two weeks ago My wife and I walked into a showroom and bought a new, well, pre registered Mercedes SLC for cash, the salesman hardly knew how to process the purchase. We paid this out of money that we have saved and paid tax on twice, once when it was earned and again when it was paid back in the form of a pension. Are we peeved? Of course we are. But are we whinging? No, we are just thankful that at our age we can buy a new car out of our own money.

However people justify the " subsidy" of company cars the fact is it comes out of the communal tax pot.

[triumph coupe]

However people justify the " subsidy" of company cars the fact is it comes out of the communal tax pot.

Eh?? What comes out of the ‘communal tax pot”? Are you suggesting that company cars are subsidised by the government??

The suggestion that company car drivers are all driving cars that they could otherwise not afford is laughable.

As a company car driver for the past 15 years I know full well that company car driving is far from a perk if you do few personal miles. There are also many other constrictions imposed by both the tax system and ones company regarding the car you can drive. It’s a ball ache.

Having just moved jobs (currently on garden leave) I couldn’t wait to hand my company car back (I did 2 months early despite liking my car) so I don’t have to pay company car tax. I asked my new employer not to give me a company car but instead offer a mileage rate. This will allow me to drive a better car, a car I want and in the long term save me money.

I opted out of the “flash car for nowt” club. I must be stupid 😉

[Chairman LMAO]

As an aside, I'm interested to hear what other self employed (Sole director Limited) folk do? Do you run a car through your company or privately as an employee?

I rattle ooff 25k miles/yr and make a small profit - not enough to offset the misery of driving in the UK though!

[danmiddle2]

It depends what you mean by driving a car you can't afford to buy? If the argument is that "most people" who lease something like a BMW 330 (or whatever) through a company car scheme can't necessarily go and buy one for cash at the RRP, then that is probably true (albeit, probably less so on TZ, given the demographic).

But that situation is not unique to company car drivers, it also applies to private leasing, loans and any other hire-purchase mechanism!? Levying a criticism at company car drivers seems oddly specific.

What most company car drivers compare is the total cost-of-ownership over whatever the lease period is. That is certainly what I use to compare, rather than taking into account depreciation. When you lease, those numbers are moot to the end consumer as the lease company has already factored that in to what they are charging you for. Ultimately, at the end of the lease you have nothing to sell, so whatever you spend is 100% depreciation.

Personally, I prefer to buy my vehicles outright and not faff with any finance etc. Hence driving a ropey old XC90. This isn't because I couldn't get the money together to buy a new or newer one... but I choose to pick something which suits my needs, and leaves me with money to spend on the things I enjoy more - my weekend cars, my watches, work to the house, etc.

Surely that is the point? We all choose to prioritise our spending where it is important to us - If someone wants to lease a BN Range Rover Vogue for £800 per month, when they can't afford the £100k price tag to buy it outright - who cares? I'd hate someone to judge me for how I spend my money....

[BillN]

Company cars that are clearly "perks" should be taxed fairly .... it's obvious and a waste of time debating how and why but .. the government should stop screwing around trying to persuade "company" drivers not to buy this and buy that and should stop wasting HMRC's time with new rules etc........ a "fair" system can obviously be worked out ........it is not "rocket science"

BUT

look at the used market for "executive" cars, and thank them .......... secondhand values are better value than they have ever been when you can buy a 4 year old, 40,000 mile BM, Merc, Audi etc., with FDSH for 50% of the new list price ....... used one year old Vauxhalls are a "steal"

I'm happy as I can get a good used car that will last me another 5 years or longer for £12k ......... silly people want new, bright shiny "toys" every one or two years ........ but that's the UK

[danmiddle2]

silly people want new, bright shiny "toys" every one or two years ........ but that's the UK

What makes them "silly people". Who are you, or I to decide where someone should spend their money? Perhaps they get a lot of enjoyment out of owning a new car, in the same way that I enjoy owning watches?

"silly people" spend a lot of money on mechanical wristwatches that are less accurate than a phone...

"silly people" spend a hundreds of pounds on a rubber strap, because it is from Omega....

Just because someones priorities are different to yours or mine doesn't make them silly.

[BillN]

What makes them "silly people". Who are you, or I to decide where someone should spend their money? Perhaps they get a lot of enjoyment out of owning a new car, in the same way that I enjoy owning watches?

"silly people" spend a lot of money on mechanical wristwatches that are less accurate than a phone...

Just because someones priorities are different to yours or mine doesn't make them silly.

"silly people" is clearly my opinion ......... it should be obvious

are you saying that your investment in mechanical watches and the enjoyment you get from them costs you money ....... all the mechanical watches that I have, have increased in value ....... but it is not really about that ....

it would be interesting to know how many have come out of the company car scheme because they have found that there initially assessment was incorrect and that paying £xxx per month is just a waste of money compared with the alternative .......

I have had company cars in the past, in fact at one time I had a BMW 528i and a Porsche 911 .... so you can put me in the "silly" people group

[danmiddle2]

"silly people" is clearly my opinion ......... it should be obvious

are you saying that your investment in mechanical watches and the enjoyment you get from them costs you money ....... all the mechanical watches that I have, have increased in value ....... but it is not really about that ....

Of course, it was your opinion that I disagree with and to which I was presenting an opposing view. This is a discussion forum, after all. I meant no offence, just don't agree.

In terms of my watch collection, some have, some haven't made money... I'd have to sell some in order to figure that out (and I mainly horde). As a pure investment, there are better vessels. A lot of recent price rises can be attributed to the poor performance of the £ compared to other global currencies. Other investments also don't need regular servicing etc too.

The truth is, I don't buy them as an investment and my point was that other people might question watch collecting as a "silly" habit.

it would be interesting to know how many have come out of the company car scheme because they have found that there initially assessment was incorrect and that paying £xxx per month is just a waste of money compared with the alternative .......

I have had company cars in the past, in fact at one time I had a BMW 528i and a Porsche 911 .... so you can put me in the "silly" people group

I used to have a company car when I was doing ~40k miles per year. It made sense then.

I no longer have one now that I do far fewer miles.

[BillN]

Of course, it was your opinion that I disagree with and to which I was presenting an opposing view. This is a discussion forum, after all. I meant no offence, just don't agree.

In terms of my watch collection, some have, some haven't made money... I'd have to sell some in order to figure that out (and I mainly horde). As a pure investment, there are better vessels. A lot of recent price rices can be attributed to the poor performance of the £ compared to other global currencies. Other investments also don't need regular servicing etc too.

The truth is, I don't buy them as an investment and my point was that other people might question watch collecting as a "silly" habit.



I used to have a company car when I was doing ~40k miles per year. It made sense then.

I no longer have one now that I do far fewer miles.

I also believe that the company car scheme encourages members to change their car far more often than they would if they owned their car privately

Company cars seem to be clearly identifiable and in a way the company car perk which stated years ago, I had my first in 1969 and my last in 1993, is a "British" thing - IMHO it has created as many problems as benefits over the years - certainly in my time, the company car was a measure of seniority and status within an organisation, causing "jealousy" amongst some staff members ........ in one company I worked for - a large steel producing group, there was a whole department, from admin, to repairs to cleaning devoted to the company car scheme........ I was even given the job of evaluating contracting this out versus keeping it in-house.

I have even heard the argument, mainly from sales people, that when I turn up to see a customer they need a flash car ....... and also the reverse, albeit from smaller businesses ....(don't go in that car as the customer will think that we are making too much money)

The Revenue has constantly had to put up with changes in the rules ............. and the Government feel that it is so important, (which IMHO it is not), that they try to influence which types of cars should be bought ...(it would be far better to do this through VAT, then at least the whole population would be influenced).

Why companies (now) bother just beats me .......... give an employee a car if he needs it for his job .......... and if he does not, pay him for his company miles and reward him in what he earns ......... the company car schemes are just a waste of so much effort on the part of many

Do the majority of company car users treat the car as if it were their own?

[Barton Red]

As an aside, I'm interested to hear what other self employed (Sole director Limited) folk do? Do you run a car through your company or privately as an employee?

I rattle ooff 25k miles/yr and make a small profit - not enough to offset the misery of driving in the UK though!

Similar here, just bought an l200 via the company as the “bus” no significant private miles so all goes through the books (fuel, Tax, insurance etc) reducing my corporation tax and 100% of the vat is allowable as it’s a commercial vehicle.

[danmiddle2]

I also believe that the company car scheme encourages members to change their car far more often than they would if they owned their car privately

Company cars seem to be clearly identifiable and in a way the company car perk which stated years ago, I had my first in 1969 and my last in 1983, is a "British" thing - IMHO it has created as many problems as benefits over the years - certainly in my time, the company car was a measure of seniority and status within an organisation, causing "jealousy" amongst some staff members ........ in one company I worked for - a large steel producing group, there was a whole department, from admin, to repairs to cleaning devoted to the company car scheme........ I was even given the job of evaluating contracting this out versus keeping it in-house.

I have even heard the argument, mainly from sales people, that when I turn up to see a customer they need a flash car ....... and also the reverse, albeit from smaller businesses ....(don't go in that car as the customer will think that we are making too much money)

The Revenue has constantly had to put up with changes in the rules ............. and the Government feel that it is so important, (which IMHO it is not), that they try to influence which types of cars should be bought ...(it would be far better to do this through VAT, then at least the whole population would be influenced).

Why companies (now) bother just beats me .......... give an employee a car if he needs it for his job .......... and if he does not, pay him for his company miles and reward him in what he earns ......... the company car schemes are just a waste of so much effort on the part of many

Do the majority of company car users treat the car as if it were their own?

When I was in my late teens / early 20's I cared a lot about what other people thought about the car I turned up in. These days, I've realised most people don't care, and neither do I.

I care more about comfort and space and value for money.

[BillN]

When I was in my late teens / early 20's I cared a lot about what other people thought about the car I turned up in. These days, I've realised most people don't care, and neither do I.

I care more about comfort and space and value for money.

exactly - same here ......................... you then wonder what all the fuss was about

I even remember on one occasion when we had a management meeting at Gleneagles in Scotland, (not a perk of course!!!), which we all flew to from London .... one guy drove to Gleneagles (and back) because he wanted to get is "business miles" up for that year ...............company cars have caused people to make illogical decisions

[David_D]

[QUOTE=BillN;4556754 silly people want new, bright shiny "toys" every one or two years ........ but that's the UK[/QUOTE]


If you think people wanting a "bright, shiny" car is silly, what's your view on people spending more than the cost of a £10 Casio on a watch??

[BillN]

If you think people wanting a "bright, shiny" car is silly, what's your view on people spending more than the cost of a £10 Casio on a watch??

from an investment, to use or decorative standpoint ...... which?

investment - up to their judgement and research, and capital gain expectation, (tax free for most) ... just like most investments ........ non financial investments should be part of everyones portfolio .. watches are certainly easier than cars, believe me, I've done both!

to use - I'd rather not bother with a £10 plastic strap watch

decorative and as a timepiece - from a male perspective, one of the few pieces of "jewellery" worn ..... so if the design and feel is liked and the intention is to keep it for some time, why not spend an amount appropriate to your income if most of your other priorities have been met, on a good watch.

are there now BIK schemes for wristwatches? ..... probably another "tax avoidance" scheme ...... should work as every young up an coming executive needs to be able to tell the time, to do his job

[Mr Nuttington]

I made the jump from Company Car to private at the start of the year having had CCs for the previous 9 years, and the numbers are interesting.

The CC was effectively costing me the BIK tax (circa £200/m) plus the car allowance that I could otherwise receive (circa £350/m after deductions). So in total I took the view that not having a CC would make me £550/m better off.

Of course I would still need a car. I chose to lease (PCH) a new Audi of pretty much the same standard as the CC on offer. Over 24 months the car will, once deposits and fees are split over the term, cost me a fixed £238/m (approx. £5700 over 2 years) plus insurance, maintenance and tyres. I am also expecting some excess mileage charges of £35/m or thereabouts. Then I give it back, rinse and repeat.

I didn't get private fuel with the CC (the BIK tax on that is eye-watering relative to the benefit). However with the private car I am able to claim tax relief on a proportion of the business fuel costs as my employer pays less than the HMRC approved figure. I don't know what this will total but it is a another win for me.

So, for me the only conclusion was that the CC was the expensive option by quite some margin compared to an admittedly very attractive lease deal . Yes there is perhaps a little more financial risk with the private car (damage costs mainly) but not enough to offset the financial gains of going private.

As an aside, I do wonder how many cars on the road are actually owned by their drivers now. If you combine Company Car numbers with private leasing and PCP cars I bet a huge proportion of the total are now owned by finance houses or manufacturers. TBH I never did see the logic of actually buying a 'normal' car of any great value with real money, especially if your ownership period was likely to be short (2-3 years); why would you want to tie up a large chunk of capital in a depreciating asset?

[BillN]

As an aside, I do wonder how many cars on the road are actually owned by their drivers now. If you combine Company Car numbers with private leasing and PCP cars I bet a huge proportion of the total are now owned by finance houses or manufacturers.

I think that this is a factor in why used car prices have fallen ........ for some, (more and more), why pay say £12k for a used car, (which they probably haven't got and it's inconvenient to borrow as they may have other borrowings), when you can walk into a car showroom, pay £1,500 advanced rental and walk out with a "new, bright, shiny car" for not much more than £250 a month.

We used to worry about "personal" credit levels, but this seems to have now moved to Leasing Companies who are financed through borrowings.......... the same exposure is there but just in a different form.

But as I said earlier ....... if you do not want to be in this "game" there are some great value car buys out there ....... but the private part-exchange and private sales market seem to be suffering