Car allowance or company car? Low mileage

davegilly

I've had a company car for 12 years, would have driven >45000km per annum so in the lowest BIK bracket.

So Covid arrived and I'm now at home 90% of the time and its new car time again. Ive asked the company about an allowance as my BIK is going to get much higher with the much lower mileage I'm doing now, probably 10K or less this year which puts me in the highest BIK range. The value the company has given me as an allowance is 7.5k.

Can anyone in a similar situation or tax genius advise which is the better option. With the allowance i was looking at a 2019 Volvo (€30K) and with the conpany car its a brand new Ford Kuga PHEV. Financially which one is better for me, short term or long term? Thanks for your help, I'm addled here trying to figure out what to do.

colm_mcm

What about a full EV? Aren’t they doing BIK exemptions for them?

davegilly

colm_mcm wrote: »

What about a full EV? Aren’t they doing BIK exemptions for them?

That option isnt available to me unfortunately. PHEV or Hybrid only.

poppers

davegilly wrote: »

I've had a company car for 12 years, would have driven >45000km per annum so in the lowest BIK bracket.

So Covid arrived and I'm now at home 90% of the time and its new car time again. Ive asked the company about an allowance as my BIK is going to get much higher with the much lower mileage I'm doing now, probably 10K or less this year which puts me in the highest BIK range. The value the company has given me as an allowance is 7.5k.

Can anyone in a similar situation or tax genius advise which is the better option. With the allowance i was looking at a 2019 Volvo (€30K) and with the conpany car its a brand new Ford Kuga PHEV. Financially which one is better for me, short term or long term? Thanks for your help, I'm addled here trying to figure out what to do.

Revenue have said that you can use your jan 2019 mileage for calculating for 2021

User1998

davegilly wrote: »

That option isnt available to me unfortunately. PHEV or Hybrid only.

Why is a PHEV option available but EV isn’t?

davegilly

User1998 wrote: »

Why is a PHEV option available but EV isn’t?

We drive a lot, well we used to anyway and the company felt an full EV wasnt suitable. Might change now though.

Anyway, can anyone answer my question as that's what i need an answer to?

bucketybuck

davegilly wrote: »

Anyway, can anyone answer my question as that's what i need an answer to?

I would have thought the post stating that you can use the 2019 mileage to be pretty relevant, no?

delly

You'll need to answer some questions for yourself really. First is will it cost you more or less than 7.5 to run your own car, including all costs for the year, personal mileage included. Second, as already mentioned, you can benchmark this years bik based on January 2020.

For Forks Sake

User1998 wrote: »

Why is a PHEV option available but EV isn’t?

My guess would be, and OP can clarify their personal situation, but most staff recieving car/allowance would, under normal (non-lockdown) circumstances be on the road the majority of their working time.

Employer expectation that they'd be on the move during the working day rather than parked up waiting for their car to recharge?

I know from personal experience that I'd regularly exceed the range of all EVs on the market during one workday. Diesel/PHEV/Hybrid can be refuelled in 5 mins, EV can't.

stayback

It’s January 2020 mileage is been used ..

User1998

User1998 wrote: »

Why is a PHEV option available but EV isn’t?

They might need to get to a customer or home in the evening without sitting in a petrol station for an hour-plus.

poppers

stayback wrote: »

It’s January 2020 mileage is been used ..

It is sorry my mistake

Buddy Bubs

750 per month is known as round sum allowance and is taxable if you're guaranteed to be paid it. So you'll get 750 less your marginal tax rate.
This won't cover you anywhere near close to 45000kms of you then have to pay for everything.

The way I do it is just claim mileage after I do the miles, that's not taxable. Is 59c per km up to 6500kms and 29c after that.

I don't do anything like that mileage but if I did 45000km I'd get about 16k in expenses that way.

For this, my fuel would cost me about 4500, tax would be 300 odd, I'd service it twice so maybe 600 euro, go through a set of tyres or maybe 2 so thats another 1000.
Within 3 years at that mileage I'm sure something would need replacing so raking warranty out of the equation maybe put 500 a year aside for that. You'll have to get your own insurance policy too and if haven't had your own one this can be pricey, although most insurers allow for company car experience. Say 1500 euro for a class 1 policy for 45000 kms.

Out of the 16000 I've incurred 9000 in day to day running expenses leaving 7000 or so for depreciation, most cars would depreciate by this amount doing 45000kms, especially anything around 40k price new.

Lleyn elec

How about you run an older car and claim the mileage driven at revenue rates?
It’s how all of the lads do it where I work. They don’t care what we drive so I’ve seen people in everything from a 2003 passat to a 640d!
The man with the passat was making a nice few €€ for the year.

jimmycrackcorm

Lleyn elec wrote:

How about you run an older car and claim the mileage driven at revenue rates? It’s how all of the lads do it where I work. They don’t care what we drive so I’ve seen people in everything from a 2003 passat to a 640d! The man with the passat was making a nice few €€ for the year.

That's a great way way of justifying a big engined old luxobarge to cover the tax and associated costs.