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New Car - Car Allowance Swap

  • 18-10-2007 7:10pm
    #1
    killerbeekilled
    Closed Accounts Posts: 14 ✭


    Hi all,

    I have the option of now swapping my current company car (giving it back) and getting a car allowance instead (at my request) added on top of my salary but not into my salary (which again would be taxed). I want to do as i now want a real car. Most companies limit there cars to four doors, and may not be 4x4 s or coupes/convertibles...

    I have discussed with the company car manager at our company, it all went swimingly well until he dropped it in at the end that the mileage allowance would still be same as if it where acompany car, i.e., i would only be allowed to claim the current 0.16c per mile versus the 0.61c per mile rate????? I didnt hav a fuel card, but my business mileage is about 15-20k per year.

    His reasoning seemed valid enough in that the company did not want to be out of expense by allowing one to make the switch. My reasoning i that any new/secondhand car i would purchase would be in fact a private car, and therefore should come under private car mileage allowance...what do you think? Im a little confused as i would have though the company could have written of any of my mileage allowance claims off as a co expense??

    I know that i would not be taxed with any BIK for having a car allowance.


    Appreciate any opinions from you with regards to what i would be entitled to!!


    Thanks All...:D


Comments

  • #2
    TychoCaine
    Registered Users, Registered Users 2 Posts: 673 ✭✭✭TychoCaine


    Hang on a sec.... If you have a company car, the company covers tax, insurance and maintenance, so that 16c is just to cover fuel and car washes. Now if you run your own car (regardless of who pays for it) you have to cover everything, so you will need the higher rate, otherwise you'll be seriously out of pocket. I drive this, so it's not the cheapest to run, but my 20,000km/year of work travel costs me €2,000 in petrol, another €1500 in maintenance & parts, €1200 in tax & insurance, and €4,000 in depreciation. That's €8,700 a year or 43.5c/km or 69.6c/m. My employer recognises this and pays me full civil service rates, which covers me with a little bit left over for emergencies, AA cover, and odds 'n sods. Depreciation isn't a factor for you because the company are basically giving you the cost of a new car, but still, you're looking at a whole lot more than 16c/mile in costs.


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