Company Car Nightmare - please help!
I recently left my old employment for a firm where I worked PAYE. My salary was 36k and on top of that I received £399.95 per month for a car allowance. Originally the car was going to get taken out from the company but they could not get the credit so I took it personally, big mistake!
Essentially from a legal point of view the finance was in my name and I got reimbursed with my wages each month to pay the finance and got taxed accordingly which worked out at around £80 per month. I have always paid for my own fuel and only claimed back fuel that I paid for, for company miles. I also taxed and insured the car personally. When I handed in my notice I advertised the car under instruction from my employer so we could see it privately and pay off the finance settlement to release me from it. The price I received was lower than the outstanding finance so my employer paid the difference directly to me as a one off payment (just over £3k)
So, I left here a couple of weeks ago and waited until a couple of days ago to get my final pay from him, which I did, however he had included this payment difference I received for the car in my wages meaning I got taxed on it!! leaving me with around 2/5th of what I was expecting to be paid! This has had a massive impact on me as I have been left very short and have young children to provide for!
Is this right? I don't understand tax implications too much but surely this cant be correct? I challenged my employer and was met with 'its HMRCs rules not mine.' This may well be the case but my employer has a pretty bad reputation with anything money related and being a little 'dodgy'
On my wage slips my car payment showed as a 'bonus' each month, same as the final £3k payment did so obviously the taxman has had a field day. To add to this the only reason the car sold for what it did is because of the very high mileage that was accumulated for work use!
If anyone can help me with this so I can challenge him with hard facts, I would be extremely grateful