Yet another BIK q

companycar2017

Sorry, I know this similar questions are asked, but I just can't seem to get my head around it for my own circumstance.

I've been offered a role, and part of the package is a company car allowance.

For simplicity, I'm just assuming that's additional salary, as that's pretty much how I assume I'll be taxed on it, so I am wondering... would there be any benefit in them providing the car and me paying the BIK?

Let's assume, that the offered allowance is 12000, and i'm paying top end tax, and with USC etc, let's call that 50%. So, I'd basically get 6000 net, 500 a month. Assuming I want to actually use the car, I'd then have tax, insurance, fuel costs, let's say 200 a month, leaving me 300 to actually fund a car. And, hey, it's Ireland right, so that isn't going to get me the new Q7.

But, let's assume the firm provided me with a car, and to keep things simple(ish), let's assume it's a 45000 car. Because I'd not be doing massive miles, I would pay 30% of the OMV as BIK, so 1125 (45000*0.3/12). Assuming I pay tax on that at 50%, the net cost to me, of a (assumed) fully funded car would be 562.5.

Now, if I take that 562.5, back to annually, it's 6750 to me. Plus, the firm has the costs of providing the car, so say that's 9000, so a total of ~15000.

If, i am roughly right on the maths, if I were to say, look drop 3k off the salary and provide me an actual car, I'd still work out in roughly the same place, right?

Most posts all seem to say "take the allowance", but I should point out, that I do actually need to replace my existing beast, so a new car is definitely on the horizon, I don't have a fat deposit to put down. I am also doing some negotiating on the salary/package overall. But, if my calculations are right, for 3k less in salary, I could have the use of a firm funded motor with no headaches.

Heisenburg81

companycar2017 wrote: »

Sorry, I know this similar questions are asked, but I just can't seem to get my head around it for my own circumstance.

I've been offered a role, and part of the package is a company car allowance.

For simplicity, I'm just assuming that's additional salary, as that's pretty much how I assume I'll be taxed on it, so I am wondering... would there be any benefit in them providing the car and me paying the BIK?

Let's assume, that the offered allowance is 12000, and i'm paying top end tax, and with USC etc, let's call that 50%. So, I'd basically get 6000 net, 500 a month. Assuming I want to actually use the car, I'd then have tax, insurance, fuel costs, let's say 200 a month, leaving me 300 to actually fund a car. And, hey, it's Ireland right, so that isn't going to get me the new Q7.

But, let's assume the firm provided me with a car, and to keep things simple(ish), let's assume it's a 45000 car. Because I'd not be doing massive miles, I would pay 30% of the OMV as BIK, so 1125 (45000*0.3/12). Assuming I pay tax on that at 50%, the net cost to me, of a (assumed) fully funded car would be 562.5.

Now, if I take that 562.5, back to annually, it's 6750 to me. Plus, the firm has the costs of providing the car, so say that's 9000, so a total of ~15000.

If, i am roughly right on the maths, if I were to say, look drop 3k off the salary and provide me an actual car, I'd still work out in roughly the same place, right?

Most posts all seem to say "take the allowance", but I should point out, that I do actually need to replace my existing beast, so a new car is definitely on the horizon, I don't have a fat deposit to put down. I am also doing some negotiating on the salary/package overall. But, if my calculations are right, for 3k less in salary, I could have the use of a firm funded motor with no headaches.

Apologies if this is a foolish question but havent dealt with BIK bar close company scenarios.
Is it not additional "notional pay" and any payroll taxes are paid by the employer thus not a cost to the employee?
If employee already at high rate it would cause an impact by shoving them to a higher marginal rate.