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Where Taxpayers and Advisers Meet

company car or allowance

Joined:Wed Aug 06, 2008 3:21 pm

Postby pmworthy » Fri Feb 25, 2005 2:07 am

I run a small business and i have 3 company cars which staff drive.

They typically do 30K business miles and run a nice car!

I am constantly getting asked about whats best for them.....currently we pay @ £350 pcm contrcat hire for vehile, its valued at either 18K or 27K and fuel is some £300 a car pcm.

would we all benefit if i paid them £400 pcm allowance & say 20p per mile....totalling about £900 pcm.

Joined:Wed Aug 06, 2008 3:11 pm

Postby ian.wright@beechams. » Tue Mar 01, 2005 1:46 am

Your question is more complext than you think with many variables and a long calculation.

It would involve on the part of the company, the cost of petrol, insurance, tax relief, tax/nic due and all other cost and reliefs due.

On the employee side you would have to way up cost of financing a car, fuel, tax, insurance, tax saving, tax costs, depreciation, fuel rates.

A rather long complex calculation is needed showing the pros and cons and I suggest you contact your accountant or 'P11D completer' to attend to the task.

You can of course seek assistance elsewhere.


Ian Wright

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