Company car tax

[hingmy]

1. does anyone understand it?
2. If so can you explain ity to me?
3. How does it relate to "commercial" vehicles.

I'm due for a new vehicle in september and am trying to hit that compromise of a vehicle that i can bear for 3 years while not crucifying myself with tax. mileage would be about 35k/p/a.

HELP. Please.

[NiceBlueWellies]

I don't understand it either, so would love it explained.

What I do know, is Yell.com 'rent' their cars to their employees for a nominal fee, then it is not an actual company car! Would love a company car, especially as my boss reversed into the side of my own car the other day!

[davidlandy]

I have a company car and do around 35k miles per annum

I will explain it later when Im not at work , but its not all good news , if I could opt out I would!



 :D

[hingmy]

Do about a similar amount and saw the tax eat my raise and leave me 40quid a month worse off this year. So am keen to ease the pain.

[NiceBlueWellies]

Just think how many more magazines you could buy with £40.  :lol:

[beast5680]

i used to have a defender van as a company car which would cost £500 per annum in tax as would a double cab pick up, anything over 5yrs old i believe would cost £250.

However the tax office have got wise to this and i believe changes are afoot so they can charge you for everything, fuel used,engine size ,how many miles you do etc so there were a few guys on the company who bought their own cars and claimed back expenses as they were better off

[hingmy]

touche (stupid keyboard where's the silly accent things for the 'e' -should read toushay, not foreign for backside)

[TimM]

BORING TECHNICAL STUFF:

VANS
This can include defender 'vans' discovery commercials, freelander commercials, pickups, double cab pickups etc.
The rules changed from 6 April 2005, at which point drivers whose only private use is for ordinary commuting, and who use the van for business purposes, will be exempt (i.e. pay nothing!). Drivers will also be exempt if private use by them (and by other members of their family and household) is 'insignificant'. Other drivers continue to pay tax as follows 'Under 4 years old' - £500 '4 years or more' - £350 (this is the amount you would be taxed on i.e. for most of us with a new van it would be £500 x 22% = £110).
From 6th April 2007 the charge will rise to £3000 irrespective of the age of the van. A seperate charge of £500 will also be levied if they do not reimburse for any private fuel used.

CARS
This will be for 'normal' Discoveries, Freelanders etc.
The tax on these is a nightmare, far too complicated to explain simply here - which is lucky or else I would be out of a job (I'm an accountant :oops: )

IF anyone wants me to look at theres specifically let me know.

Tim.

[NiceBlueWellies]

From 6th April 2007 the charge will rise to £3000 irrespective of the age of the van.

 :shock:  :shock:  :shock:

[hingmy]

TimothyM you beauty.
Thanks chap.
I'm away for the next to weeks but can i have a proper chat when i come back. The situation is as follows: My employment terms include a car from which at present i can't opt out of. I do in excess of 35k a year. I don't need a family 5 seater and because of work could justify a four wheel drive, though the employer may not like the service and fuel costs. To alleviate his burden i was looking at a 3dr golf tdi (£477 tax to me) but from what you say a commercial would at present be tax free. Am i correct in reading your answer that as of april 2007 i would be taxed at 22% of 3k (£660 p/a). What happens to a car like the golf at april 2007?

[TimM]

Yes you are reading it right,

potentially £3000 for the van and £500 for the fuel...

£3000 + £500 = £3500

£3,500 at basic tax rate of 22% = £770 a year or £64 a month.

If you pay higher rate - £3500 x 40% = £1400 a year or £116 per month

And the bad news is the 'cars' are worse.

Tim.

[hingmy]

oh deary me. THis years raise disspaeared in car tax and i don't really use the blooming thing privately. Harrumph.
Time to start training a dog sled team.
Thanks for clearing the mists a little. I may pick your brains about the current vehicle when i come back.
Thanks
Steve

[davidlandy]

the car tax is based upon the list price of the cars plus extras, then the emissions category that it fits into.

the categories have bands of co2 output but you have to add 3% for a diesel engine

example : my car is a VW passat sport tdi, list price is £19,000 approx

the CO2 output is 157 which means it is in the bracket of 18% plus the 3% diesel surcharge + 21% (this may not be up to date)

I therefore have to pay the tax on 21% of the cars price ie £3990

40% of £3990 = £1596/ 12 months = £133 per month

And I dont get fuel for private use, so there is another calcualtion to add to this if you do get the fuel provided by your company.

[simdeb]

three years ago i changed from a company car to a freelander commercial to save on tax .

with the changes i will not have to pay any tax but , what you can do is limmeted

you can only use it to go to work and home , you can call on your way back from work ie shops ? but if you go home and then go to shop thats private use and you have to pay tax

other thing i have been told is to become a  commercials it can have seats only in the front and no seats in the back or windows

stopping with mine not worth paying all the extra tax can run my disco with the money i am saving :lol:  :lol:

[TimM]

Going to the shops at night - if you are talking about say 'a trip to Tescos' - would not be a problem if you do lots of mileage during the day to make that trip 'insignificant' (which they haven't specified what this means), what they are trying to avoid is people having one, going to Tescos, then round to their friends, then to the pub, and then taking it to France for a booze cruise at the weekend.

Lots of my clients give their staff vans to take home so they can go straight to the 'next job' from home, or for some, can be on 24 hour call, if your boss doesn't mind you 'nipping to the shops' then the Inland Revenue probably won't either, they are not all  :twisted:

Tim.

[TimM]

.
To alleviate his burden i was looking at a 3dr golf tdi (£477 tax to me) but from what you say a commercial would at present be tax free. Am i correct in reading your answer that as of april 2007 i would be taxed at 22% of 3k (£660 p/a). What happens to a car like the golf at april 2007?

IF at present you would be tax free then April 2007 you will still be tax free - UNLESS you are doing 'significant' private mileage.

have a look through the posts further up and you will see what I mean.

Company CAR tax has always been 'expensive' and will not be significantly changing for the near future.

Many people who can 'opt out' of having a company car do, and buy their own then claim 40p per mile for the first 10,000 miles of business use and 25p a mile thereafter, so at your 35,000 miles you would claim:

10,000 miles at 40p = £4,000
25,000 miles at 25p = £6,250

TOTAL                      Ã‚£10,250 each year (tax free)

Which to many people far exceeds the cost of buying and running their own car, and saves them on tax costs.

Tim  8)

[woody]

Do about a similar amount and saw the tax eat my raise and leave me 40quid a month worse off this year. So am keen to ease the pain.

this may or may not help(could even be playing in the wrong sand pit)
i have worked in a number of garages and we used company vehicles from a small pool (about 3) of vehicles no single person had use a vehicle and nobody paid any extra tax.
with the money saved you could put it towards your next 4x4 (or the wife could spend it)

[dazzawhipple]

.
To alleviate his burden i was looking at a 3dr golf tdi (£477 tax to me) but from what you say a commercial would at present be tax free. Am i correct in reading your answer that as of april 2007 i would be taxed at 22% of 3k (£660 p/a). What happens to a car like the golf at april 2007?

IF at present you would be tax free then April 2007 you will still be tax free - UNLESS you are doing 'significant' private mileage.

have a look through the posts further up and you will see what I mean.

Company CAR tax has always been 'expensive' and will not be significantly changing for the near future.

Many people who can 'opt out' of having a company car do, and buy their own then claim 40p per mile for the first 10,000 miles of business use and 25p a mile thereafter, so at your 35,000 miles you would claim:

10,000 miles at 40p = £4,000
25,000 miles at 25p = £6,250

TOTAL                      Ã‚£10,250 each year (tax free)

Which to many people far exceeds the cost of buying and running their own car, and saves them on tax costs.

Tim  8)

Umm This is what I do for my own Limted company I do 30,000 miles a year

[TimM]

You are quite right, pool cars are not taxable to any particular individual, and hense are not taxable at all.

BUT

These cars must not be for the exclusive us of any particular employee, they must (or usually should) be left at the 'business' overnight, and should not be used for any 'private' mileage.


Tim.