Company car tax

[Blue nose]

Just reading that some are paying £400 a month in company car tax...my DH has the option of a company car from January. He's been told the tax will be about £70-80 a month. Does this sound right?

It'll be a 3series BMW hybrid with lots of extras so about £48k on the road price.

He won't do any business mileage or very very little.

Up until recently he drove a works van to/from work and others used during the day. This was written off and he's using a pool car on a temp basis but need to get permanent solution.

Is the car tax worth getting a nice new BMW? I've tried the online calculator but it's confusing. He isn't a higher tax payer if that makes a difference.

[Perthite]

Yes that tax sounds right for one of those and paying so little to get a car like that is an absolute bargain!

[Tinkerbell 1]

Being a basic rate tax payer will help. I know you said the calculator is confusing what does it say the tax will be? You take the the benefit amount and then work from that. The fleet firm should be able to tell you.

Beware although it maybe 70-80 this year it can go up each tax year. Mine has gone up quite a bit the last few years.

[Perthite]

This shows the annual charge for a 20 taxpayer on 3 Series hybrids.

[The Fatadder]

At current rates for a 20% tax payer I think £70-80 now rising by about £10 per year for the next two years sounds right to me. Makes it an appealing proposition, certainly an awful lot cheaper than leasing a new one (especially given you have no maintenance to worry about).

How long do you have to commit to the decision for? The government have confirmed the rates for the next 2 tax years after the current one. But there is no indication as to what will happen next.

I would say there is a reasonable chance that Hybrids will end up getting a larger tax increase in the 23/24 tax year. (Given they are trying to push people towards pure electric)

[The 2 Minnies]

My DH has a diesel 420 BMW (I think that’s what it is anyway) and pays around £9000 Per annum in tax on it. He is waiting for his new hybrid BMW to arrive and his tax liability will drop dramatically once he gets this, that’s his main reason for getting a hybrid this time round.

[SteveC]

£70-80 a month company car tax sounds great. I’ve just eliminated my monthly tax bill which was around 10 times that by changing my company car to an all electric Tesla Model 3. Huge saving and a really nice car too.

[Blue nose]

Thanks all. Sounded too good to be true but image below is similar to what DH found.

Good idea to check on length of commitment.

[123]

Originally Posted by Blue nose

Just reading that some are paying £400 a month in company car tax...my DH has the option of a company car from January. He's been told the tax will be about £70-80 a month. Does this sound right?

It'll be a 3series BMW hybrid with lots of extras so about £48k on the road price.

He won't do any business mileage or very very little.

Up until recently he drove a works van to/from work and others used during the day. This was written off and he's using a pool car on a temp basis but need to get permanent solution.

Is the car tax worth getting a nice new BMW? I've tried the online calculator but it's confusing. He isn't a higher tax payer if that makes a difference.

See more...

I'm amazed any company will give out a car costing £48k to an employee they don't even pay that much a year.

If they are offering it snap their hands off, but maybe if they can afford 48k maybe go for a 30k BMW and see if they'll give him a 4k a year pay rise as well.

Don't ask, don't get... Always been my motto

[catherinesian]

Originally Posted by 123

I'm amazed any company will give out a car costing £48k to an employee they don't even pay that much a year.

If they are offering it snap their hands off, but maybe if they can afford 48k maybe go for a 30k BMW and see if they'll give him a 4k a year pay rise as well.

Don't ask, don't get... Always been my motto

See more...

I entirely agree with this.

Also. Does he have the option of a car allowance or company car?

I did and I took the car allowance. I now get £500 extra PCM and no additional P11D tax burden. I'm a higher rate tax payer so net about £300 per month (you will net more as a BR taxpayer). It was cheaper this way vs company car to get the car I wanted. For you - lease payments on a £48k car will be significant, so see how much they will give you as a car allowance, work out the net and then add the money you will be spending on BIK tax (the £80pcm), then you might find you can potentially lease/finance it yourselves cheaper. However being a 20% taxpayer you are at an advantage so it might not work out better for you like it was for me.

For me, I actually bought the car outright as I had the funds to do so, then my £300pcm goes straight into a savings account and in 3 years time I'll have £11k to upgrade with if I want to.

EDIT; If it's the car in place of a payrise or car allowance, you need to factor in the full cost of having that car as it's clearly more than the £70 a month in that case. If it's that car or nothing, then makes the decision easier.