Company car v Personal Car

Big Nelly

Hi Guys,

Was wondering could anyone in this situation help, have moved job so now working in a sales environment which will mean alot of on the road travel. Get the usual extras for this but was wondering which is the better option:

1. Stick with my own car and get milage on it?
2. Get a lease car and get company to subside the costs including petrol etc?

Now I know with my own car I wont have to pay benefit in kind but it will also dramtically reduce the price of car because of milage(Im am already on 20k a year before this job) which is why I was thinking of going towards a company car/lease car so I can just hand back when lease is over.

But then if I get a lease car I get taxed on benefit in kind, is this going to kill me on tax? or in the long run will it work out cheaper because I am not paying for and then killing the price of my own car with milage?

Must be people out there in both situation so would they tell me what they think? cheers

prospect

Big Nelly wrote:

Hi Guys,

Was wondering could anyone in this situation help, have moved job so now working in a sales environment which will mean alot of on the road travel. Get the usual extras for this but was wondering which is the better option:

1. Stick with my own car and get milage on it?
2. Get a lease car and get company to subside the costs including petrol etc?

Now I know with my own car I wont have to pay benefit in kind but it will also dramtically reduce the price of car because of milage(Im am already on 20k a year before this job) which is why I was thinking of going towards a company car/lease car so I can just hand back when lease is over.

But then if I get a lease car I get taxed on benefit in kind, is this going to kill me on tax? or in the long run will it work out cheaper because I am not paying for and then killing the price of my own car with milage?

Must be people out there in both situation so would they tell me what they think? cheers

I think I am right in saying this, but am open to correction:

If your company give you a car allowance, you are liable for BIK on that also.

Anan1

Best to start off with a large sheet of paper, draw a line down the middle of it. On one side, calculate the total cost of using your own car over a year, ie depreciation, fuel, tax, insurance, and any other costs, less the mileage you'll get. On the other side, do the figures for the company car. It'll take a bit of time, but you'll get your answer. The figures, of course, will be different for everyone. Hope this helps.

Big Nelly

prospect wrote:

I think I am right in saying this, but am open to correction:

If your company give you a car allowance, you are liable for BIK on that also.

open to correction here but if I am just getting milage for use of my personal car then no BIK is applied, its only if the company help me pay for the car itself

Thats the way I took it

Big Nelly

Anan1 wrote:

Best to start off with a large sheet of paper, draw a line down the middle of it. On one side, calculate the total cost of using your own car over a year, ie depreciation, fuel, tax, insurance, and any other costs, less the mileage you'll get. On the other side, do the figures for the company car. It'll take a bit of time, but you'll get your answer. The figures, of course, will be different for everyone. Hope this helps.

This is a good idea but as I have only started I havent a clue what the milage is going to cost me over a year in the new job, asked guys and they hadnt a clue either, majority have company cars

crosstownk

You do not pay BIK on car/mileage allowance but you do pay income tax (PAYE & PRSI) which can work out in your favour.

After that the other main factor is that if you leave (or get fired:eek: ) you will still have your car to go home in!!! If you take a company car you could also possibly loose your no claims bonus as you will be insured with you company's insurer. Your employer should also be aware that if you end up using your own car for work THEY are responsible for ensuring it roadworthyness (Health & Safety)

Hope this helps.................

alias no.9

BIK is inversely proportional to 'work' mileage, i.e. you pay less, the higher your mileage is so people who genuinely use their car for work don't pay through the nose but those who get it as a perk do.

Anan1

Big Nelly wrote:

This is a good idea but as I have only started I havent a clue what the milage is going to cost me over a year in the new job, asked guys and they hadnt a clue either, majority have company cars

As in you don't know how much mileage you'll be doing? In that case, I suppose you'll just have to make an educated guess. You can work out how much your own car will cost per 100kms/miles driven pretty easily, then just factor it up. I know it's not going to be incredibly accurate, but it should give you a better picture than you have now.:)

Seth Brundle

Big Nelly wrote:

open to correction here but if I am just getting milage for use of my personal car then no BIK is applied, its only if the company help me pay for the car itself

Thats the way I took it

What mileage allowance are they offering you?

crosstownk wrote:

You do not pay BIK on car/mileage allowance but you do pay income tax (PAYE & PRSI) which can work out in your favour.

Mileage is an expense (if not driving to and from work) so not taxable.
http://www.revenue.ie/leaflets/it51.htm

Big Nelly

kbannon wrote:

What mileage allowance are they offering you?

There is no cut off point if thats what you mean, just whatever you drive in the month you claim it back

kbannon wrote:

Mileage is an expense (if not driving to and from work) so not taxable.
http://www.revenue.ie/leaflets/it51.htm

Yeah we get milage but not for going in and out of office

Seth Brundle

Big Nelly wrote:

There is no cut off point if thats what you mean, just whatever you drive in the month you claim it back

but at what rate per km and is it engine cc dependant?

Big Nelly wrote:

Yeah we get milage but not for going in and out of office

So its not taxable.

You may also need to notify your insurance company if you are using the car for work and being compensated for it. This may cause your premium to rise slightly.
On the other hand, if you chose a company car you may not or could have difficulty in getting recognition of your no claims history on the company policy.

prospect

I really think there is a limit you can claim, and if you go over that it is taxable.

I think it is equal to the civil service limit, but that is probably €5 per mile

JimmySmith

You can actually make money from mileage if you know what you are doing.

Some companies give you civil servcie rate which i think now is about €1.25 a mile or thereabouts for the first 4000 miles. I think its around 50 cents a mile after that.

Some give you more and some less.

I dont believe you are taxed on it as its expenses. Basically your company are paying for your petrol and wear and tear on your car. This is solely for work purposes' so its not part of your salary, so is not taxable.

unkel

A lot of confusion in this thread, but kbannon came closest

Mileage is not taxable, provided:

1. It does not cover travel to and from the office
2. If you go to a client from your home, the distance covered is the minimum of the distance from your home to the client or from the office to the client
3. Government rates may apply but they are not favourable if you do high business mileage. They are also relative to engine size
4. Deals can be struck with the revenue where a flat unlimited rate is used, i.e. €0.60 per mile

Generally the higher the business mileage with your own car that is capable of high mileage, the cheaper it works out with your own car. You might make a nice bit of money with it

As Anan1 suggested, you have to do your sums. Also take into consideration the ease of mind a company car gives. You're not responsible for anything! Indeed you need to have limited business insurance cover if you travel for work, although this is not expensive

unkel

kbannon wrote:

http://www.revenue.ie/leaflets/it51.htm

Ah, the rates are in kilometers now. Nice one

prospect

I checked this out, and it depends on two things:

1. Engine Capacity
2. Miles covered

E.G.
For business mileage in a motor car over 1501cc you are allowed:
77.21 cent per km for the first 6437km's
and
35.67 cent per km over 6437km's

If your company pays more than the above rates you are liable for tax on the difference.

Raytown Rocks

Hi Big Nelly
BIK on a company car depends on how much mileage you do.
The more mileage the lower the BIK.
I have a company car,petrol card, but my mileage is low( below 15,000)
My BIK payment per year is based on 30% of the original market value (OMV) of the car divided over 12 months .I do not pay BIK on the petrol card becuse this 30% includes 4.5% for this purpose.
If my mileage was to increase the BIK on the OMV reduces : IE from 30% downwards, and the more the mileage the lower the percentage.
Also note that the revenue will automatically allocate 5,000 miles minimum a year as personal mileage.
Hope this helps a little
Chef

unkel

prospect wrote:

If your company pays more than the above rates you are liable for tax on the difference.

No. Read my post. Untaxed fixed rates for unlimited mileage, independent of engine size can be used. Very common in Ireland too, e.g. in the IT industry. I've been paid those for years...

prospect

unkel wrote:

No. Read my post. Untaxed fixed rates for unlimited mileage, independent of engine size can be used. Very common in Ireland too, e.g. in the IT industry. I've been paid those for years...

But surely there is a limit, otherwise everybody would be screwing it?

Seth Brundle

prospect wrote:

But surely there is a limit, otherwise everybody would be screwing it?

its not screwing the system - you have to remember that it is in theory an expense. The cost of running a car has increased a lot more than the civil service rates have in recent years. Inputs such as petrol, depreciation, servicing, tyres, etc. are all factored in when calculating mileage so its not really free money.
However, if you use a cheap old banger you could 'keep' more of it than a brand new car

Big Nelly

Thanks for all the info, going to go to the best person on this, HR, will prob takje a week for an answer while they make sure everything they send is legal but will give me a basis

Will post any interesting finding but I would say that each company has differnece setups