Car Allowance/Company Car

MunsterAllDay

I am wondering what people’s experience is with car allowance and company car, with car allowance did you also receive fuel allowance/card? Did you pay BIK on personal use of fuel card with allowance/company car?

jimmycrackcorm

It depends on your usage - is it actually used for business purposes or a perk?
I've had and/or both but it worked in a manner to justify the usage.

MunsterAllDay

jimmycrackcorm wrote: »

It depends on your usage - is it actually used for business purposes or a perk?
I've had and/or both but it worked in a manner to justify the usage.

Business mileage would be low, max 5k per year bunisess. If I could get car allowance with fuel card, that sounds the best option. I don’t any reason why I wouldn’t be able too, the same would surely apply to company car and fuel card?

championc

Get an EV - even a second hand one. Fuel will cost feck all and BIK exempt until the end of 2022. After that, I cannot see it being at the full ICE rate

Robotfarmer

Business mileage expenses will probably be introduced in 2023 when they reintroduce BIK.

Should the government make it mandatory that companies provide a charging station at work or is it already mandatory.

ICE cars probably still the best but will car tax and diesel prices increase by much in budget 2022.

MunsterAllDay

Robotfarmer wrote: »

Business mileage expenses will probably be introduced in 2023 when they reintroduce BIK.

Should the government make it mandatory that companies provide a charging station at work or is it already mandatory.

ICE cars probably still the best but will car tax and diesel prices increase by much in budget 2022.

EV not really an option, very costly for the company. Although they make sense for the employee.
My assumption is an employee can have a car and fuel card for business use, or an allowance and fuel card for business use?

championc

MunsterAllDay wrote: »

EV not really an option, very costly for the company. Although they make sense for the employee.
My assumption is an employee can have a car and fuel card for business use, or an allowance and fuel card for business use?

Well what allowance is being offered ? You could use the allowance to find a second hand EV. You could buy a 2016 Leaf for little more than €10k. Your running costs will be fook all

MunsterAllDay

championc wrote: »

Well what allowance is being offered ? You could use the allowance to find a second hand EV. You could buy a 2016 Leaf for little more than €10k. Your running costs will be fook all

Allowance of €8k gross. As I do long journeys regularly, EV may not be most practical, especially the older models with limited range.

championc

MunsterAllDay wrote: »

Allowance of €8k gross. As I do long journeys regularly, EV may not be most practical, especially the older models with limited range.

Well that it at least €400 per month for a PCP. It's worth exploring since you would be paying out the same amount as you will likely pay out in BIK, but you will own the asset.

So what is your longest tourney ? Do you overnight before coming back ? Is there a DC Fast charger at your destination ?

And how much are you spending per year on fuel ? Look at the overall costs over 5 years, including servicing. I think you'd barely spend €300 per year on Electricity

Robotfarmer

championc wrote: »

Well that it at least €400 per month for a PCP. It's worth exploring since you would be paying out the same amount as you will likely pay out in BIK, but you will own the asset.

So what is your longest tourney ? Do you overnight before coming back ? Is there a DC Fast charger at your destination ?

And how much are you spending per year on fuel ? Look at the overall costs over 5 years, including servicing. I think you'd barely spend €300 per year on Electricity

Only €300 a year on electricity. Wow. What mileage is that based on

championc

Robotfarmer wrote: »

Only €300 a year on electricity. Wow. What mileage is that based on

400km is about €6 on night rate. 60kW @ 10c per kWh.

€300 / €6 = 50 times x 400km = 20,000km

Energia has a night rate EV tariff @ less than 5c per kWh

So like i said, you'd be hard pushed to spend €300 per year. That's €1500 over 5 years.

Iny former petrol, I was filling up with €85 every 2 weeks - so €2k per year in petrol costs, or €10k over 5 years !!!

howardmarks

Bik on an employer provided vehicle and a car allowance are not taxed the same way.
Car allowance is treated as additional pay and taxed accordingly.
https://www.revenue.ie/en/employing-people/employee-expenses/round-sum-allowances/index.aspx

Calahonda52

MunsterAllDay wrote: »

Business mileage would be low, max 5k per year bunisess. If I could get car allowance with fuel card, that sounds the best option. I don’t any reason why I wouldn’t be able too, the same would surely apply to company car and fuel card?

CA + FC is not an option that will be offered as the CA is taxed in your hands and the FC is subject to BIK so messy from employers perspective.
CA makes it easy for both sided.

IIRC the math is as follows.

Say car OMV on day 1 is 33,000
BIK at 30% pa so 9,900 every year
BIK is 52% iff u are paying at top rate so 5148 is annual cost of car to u and company pays everything

8k allowance also taxed at 52% so 48% left, or 3840, from which you pay everything

One advantage off the allowances is that you generate your own NCB, not all insures give full credit for CC driving years.
CA much more attractive to company, the admin on CA's is burdensome, taxing, insuring, accidents, NCT, maintenance, checking business mileage...etc

MunsterAllDay

Calahonda52 wrote: »

CA + FC is not an option that will be offered as the CA is taxed in your hands and the FC is subject to BIK so messy from employers perspective.
CA makes it easy for both sided.

IIRC the math is as follows.

Say car OMV on day 1 is 33,000
BIK at 30% pa so 9,900 every year
BIK is 52% iff u are paying at top rate so 5148 is annual cost of car to u and company pays everything

8k allowance also taxed at 52% so 48% left, or 3840, from which you pay everything

One advantage off the allowances is that you generate your own NCB, not all insures give full credit for CC driving years.
CA much more attractive to company, the admin on CA's is burdensome, taxing, insuring, accidents, NCT, maintenance, checking business mileage...etc

Yeah very much what I was thinking, I would also assume my fuel is paid with the allowance for business use. I wouldn’t mind the allowance in that case.

MunsterAllDay

Calahonda52 wrote: »

CA + FC is not an option that will be offered as the CA is taxed in your hands and the FC is subject to BIK so messy from employers perspective.
CA makes it easy for both sided.

IIRC the math is as follows.

Say car OMV on day 1 is 33,000
BIK at 30% pa so 9,900 every year
BIK is 52% iff u are paying at top rate so 5148 is annual cost of car to u and company pays everything

8k allowance also taxed at 52% so 48% left, or 3840, from which you pay everything

One advantage off the allowances is that you generate your own NCB, not all insures give full credit for CC driving years.
CA much more attractive to company, the admin on CA's is burdensome, taxing, insuring, accidents, NCT, maintenance, checking business mileage...etc

Does that mean I can’t get a FC with Company car either?

MunsterAllDay

Calahonda52 wrote: »

CA + FC is not an option that will be offered as the CA is taxed in your hands and the FC is subject to BIK so messy from employers perspective.
CA makes it easy for both sided.

IIRC the math is as follows.

Say car OMV on day 1 is 33,000
BIK at 30% pa so 9,900 every year
BIK is 52% iff u are paying at top rate so 5148 is annual cost of car to u and company pays everything

8k allowance also taxed at 52% so 48% left, or 3840, from which you pay everything

One advantage off the allowances is that you generate your own NCB, not all insures give full credit for CC driving years.
CA much more attractive to company, the admin on CA's is burdensome, taxing, insuring, accidents, NCT, maintenance, checking business mileage...etc

Does that mean I can’t get a FC with Company car either?

sdanseo

Did the maths on this recently for my work, my situation is complicated by the fact I wanted to retain my own car which is on private HP but even taking the company's offer of a car into account the BIK would have been lethal.

Opted for mileage expenses based on civil service rates, vouch them once a month based on the odo and its as a business expense.
These rates are non taxable and are designed to cover, but generally exceed the actual cost of running the car. Depends how you drive, what you drive, annual maintenance costs etc of course. If you've an M5 and your job is a delivery driver it probably won't end well.

Probably comes with a highly increased chance of a revenue audit over time so keep records.

championc

I could never understand people taking company cars due to BIK, if an allowance was on offer.

BIK will cost the guts of 400 per month (and more) so €15000 over 3 years - to own absolutely nothing.

Surely a PCP deal will cost less than that, and in many cases, would be well covered by an allowance. And after 3 years, you might have paid out €15k, but at least you have something for your money paid.

Going EV takes it a step further, where, if paid by the mile and doing decent business milage, can recoup the monthly cost easily.

MunsterAllDay

championc wrote: »

I could never understand people taking company cars due to BIK, if an allowance was on offer.

BIK will cost the guts of 400 per month (and more) so €15000 over 3 years - to own absolutely nothing.

Surely a PCP deal will cost less than that, and in many cases, would be well covered by an allowance. And after 3 years, you might have paid out €15k, but at least you have something for your money paid.

Going EV takes it a step further, where, if paid by the mile and doing decent business milage, can recoup the monthly cost easily.

Agree 100%.

I spoke to finance, and an allowance with business mileage reimbursement looks like most likely option.

Robotfarmer

championc wrote: »

400km is about €6 on night rate. 60kW @ 10c per kWh.

€300 / €6 = 50 times x 400km = 20,000km

Energia has a night rate EV tariff @ less than 5c per kWh

So like i said, you'd be hard pushed to spend €300 per year. That's €1500 over 5 years.

Iny former petrol, I was filling up with €85 every 2 weeks - so €2k per year in petrol costs, or €10k over 5 years !!!

I guess it depends on type of EV and driving style. Probably twice that cost if on motorway driving.

championc

Robotfarmer wrote: »

I guess it depends on type of EV and driving style. Probably twice that cost if on motorway driving.

Actually no it's not. Post a question in one of the several EV forums.

But someone should work out as to how much they are likely to be re-imbursed each month and do the maths

MunsterAllDay

championc wrote: »

Actually no it's not. Post a question in one of the several EV forums.

But someone should work out as to how much they are likely to be re-imbursed each month and do the maths

An EV would be great, but a decent one is €35k plus. Range would be a concern, daily trips can be 250km plus.

championc

MunsterAllDay wrote: »

An EV would be great, but a decent one is €35k plus. Range would be a concern, daily trips can be 250km plus.

So you need a Kona or e-Niro. They will both cover that distance, even in Winter. It's worth doing the sums at least

Robotfarmer

championc wrote: »

So you need a Kona or e-Niro. They will both cover that distance, even in Winter. It's worth doing the sums at least

Tesla is too expensive as is ID4.
Kona or Niro. How many km can they do. I'd like to have 400-500 km. Also need a family car. Currently have a Passat. Would ID 3 be suitable for family car?

Robotfarmer

Just check kona and looks great from outside. Interior looks boring but not end of the world. Small boot is an issue for family trips. Not going to work so will have to rule it out.

championc

I have an e-Niro. We got a range of 470km last summer and a range of about 390 in the coldest part of winter.

The e-Niro was introduced in early 2019. People will go for the second edition (from Mar 2020 - large infotainment screen) but there should be a few First Editions floating around. The Kona I think was around in 2018, so there would be value there. Both have a 64kW battery, which should give you a rough idea of range of others.

MunsterAllDay

championc wrote: »

I have an e-Niro. We got a range of 470km last summer and a range of about 390 in the coldest part of winter.

The e-Niro was introduced in early 2019. People will go for the second edition (from Mar 2020 - large infotainment screen) but there should be a few First Editions floating around. The Kona I think was around in 2018, so there would be value there. Both have a 64kW battery, which should give you a rough idea of range of others.

Good range.

What about practicality, I have two small kids, one on the way. I wonder how that would work?

championc

MunsterAllDay wrote: »

Good range.

What about practicality, I have two small kids, one on the way. I wonder how that would work?

The e-Niro has the largest of all of the EV Crossover / SUV's. I think there's easily room for 3 in the back, and even if 2 were in car seats.

There are two levels in the boot. I removed the upper level giving me an additional 4" of depth.

Robotfarmer

championc wrote: »

The e-Niro has the largest of all of the EV Crossover / SUV's. I think there's easily room for 3 in the back, and even if 2 were in car seats.

There are two levels in the boot. I removed the upper level giving me an additional 4" of depth.

Had bad experiences in the past with Kia. Will take some time before I trust them again.

Romero

Sorry for bringing up an old thread but, company I work for have decided to pull Company Cars from our team, I have been driving a Diesel 2020 Skoda Octavia Estate that the company provided from a Lease company, Company tax and insure it and have a fuel card and pay 30% BIK on the value added to my Gross income of €8000 per annum. They now want to pay €8000 Vehicle Allowance, they state the allowance is not a benefit, they also put the following conditions down on the Car I purchase :-

1) The purchased vehicle should be fit for business use with ample boot size I work in IT mostly from home but sometimes need to carry tools and parts for calls I might need to attend.

2) Need to provide proof of Motor insurance that covers both private and Business use and share this policy with my company. As I sold my own personal car when I got the company car, I've been on company insurance since 2019, I'm hoping the company insurers will provide some proof of my zero claims in company car to keep costs down but I take it Business/Personal insurance will cost more then standard.

So if the figures from above of the 8K being taxed at 52% leaving me with €320 a month towards a car plus any business mileage I can expenses (which wont be much), seems like I'm getting a bad deal as I don't want to go down the PCP route as they require 10% deposit which I don't have so I'd have to borrow say 25K over 5 years which is say with AIB will be €514 over 5 years and that doesn't take into account tax and Insurance.

Company is UK based so don't think they fully appreciate the additional costs over here.

Any advice much appreciated as this is causing me undue stress trying to figure out what to do?

championc

Well you might be down on the deal somewhat, but you are owning an asset as opposed to paying €xxx per month and owning nothing whatsoever.

I could never understand people taking company cars.

But look at whether you can get onto the electric ladder while it could be part subsidized by your company