Benefit in kind company car tax dilemma

[andy armitage]

Hi guys my company car is up for renewal at the end of March so I will have to order one soon but I just don't know what to do :) and before anybody comes on wittering on that we get to drive a new car on the cheap please don't because I don't use it ever for personal use.

It bugs me so much that I get hammered as I never use the car for private mileage it is used only to do my job but as I am a rep on the road I have to keep the car at home so I have to pay!

The dilemma is what on earth do I order :) I currently have a Golf GTD which casts me around £8200 over 3 years, now I can't have a full electric car as it is too early and nothing is really in place for electric so I was considering a plug in hybrid to save money but it seems so much hassle for a range of about 25 to 30 miles so I was then thinking a petrol hybrid but the choice is just grim, a Kia Niro a Hyundai ioniq a Toyota Prius, all so dreary and as for that rear spoiler on the ioniq that obscures rear visibility well words fail me there.

I find the hybrids just so unispiring

Then I am thinking sod it just get a nice car as 3 years in a car I don't like won't be good and I really like the new Peugeot 3008 SUV even though I always get German cars that 3008 is so nice but the first year is going to cost me around £270 a month and year 2 around £279 a month and year 3 rates aren't out yet so it will cost me about £6600 over 2 years and after 3 years it will no doubt hit £10k is that excessive?

This is my last year paying for the Golf which is costing me £252 a month at present.

I was just wondering what you guys pay per month :)

[zelig]

Same situation here. I’m due to change in Feb 2019 - so need to order in December.

My Jag XF has jumped a few bands in BIK under new WLTP rules, so its no longer an option.
I’m awaiting release date of the new Lexus ES hybrid (basically a Camry with a Lexus make over )
Predictions are that it should be around 110g/km and no 4% diesel surcharge.
It arrives in UK Q1 2019. So for me it makes it a possible (if boring) option...

The alternatives are the smaller Lexus IS300h - had one before - nice but a little uninspiring.
Mitsubishi PHEV - but I’m not convinced by build quality - other owners I know have not been impressed.

Or or suck it up & take a Mercedes E220d or Volvo S90 D4 - both around 122g/km.
...but I’d have to pay >£300/month for those

Any other suggestions very welcome.

z

[David_D]

What about the BMW hybrids?

Not sure what they offer now. I was tempted a few years back when they offered a 3 series with the 3 litre twin turbo engine and 30 odd bhp electric engine. It could tootle along on the electric alone (slowly, I imagine!) or if you wanted max power, both petrol and electric engines worked together.

[andy armitage]

The BMW hybrids are out of the companies usual lease cost and apart from the 330e there isn't really anything suitable as the i3 is electric and the hassle of getting a charger fitted at home to then plug it in for a short range of 25 miles and I will have to pay for the electric isn't that appealing :)

[zelig]

What about the BMW hybrids?

Not sure what they offer now. I was tempted a few years back when they offered a 3 series with the 3 litre twin turbo engine and 30 odd bhp electric engine. It could tootle along on the electric alone (slowly, I imagine!) or if you wanted max power, both petrol and electric engines worked together.

330e - It’s longer available.
Old model had to be registered before 31 August to be eleigile under older regs.
From 1 September vehicles have to be registered under new rules.
Presumanly because the new WLTP rules make them less appealing to business users.
The longer WLTP cycle means the petrol engine would cut in more and deliver higher emissions figures.

New models 325e and 330e are due out soon - Q1 2019 again.
Dealerships are not taking orders yet. AFAIK.

z

[andy armitage]

Same situation here. I’m due to change in Feb 2019 - so need to order in December.

My Jag XF has jumped a few bands in BIK under new WLTP rules, so its no longer an option.
I’m awaiting release date of the new Lexus ES hybrid (basically a Camry with a Lexus make over )
Predictions are that it should be around 110g/km and no 4% diesel surcharge.
It arrives in UK Q1 2019. So for me it makes it a possible (if boring) option...

The alternatives are the smaller Lexus IS300h - had one before - nice but a little uninspiring.
Mitsubishi PHEV - but I’m not convinced by build quality - other owners I know have not been impressed.

Or or suck it up & take a Mercedes E220d or Volvo S90 D4 - both around 122g/km.
...but I’d have to pay >£300/month for those

Any other suggestions very welcome.

z

The Peugeot is 120g c02 which isn't that high but still gets hammered in tax

[zelig]

It’s the 4% surcharge for diesels.
Find a petrol or hybrid with 120-140g/km & it’ll probably be cheaper.
z

[andy armitage]

It’s the 4% surcharge for diesels.
Find a petrol or hybrid with 120-140g/km & it’ll probably be cheaper.
z

I am not even considering diesels it will be a petrol and the 3008 is a 1.2 petrol with 120g c02 but still costing 3275/300 a month!

[zelig]

Government stealth tax - WLTP just pushes cars into higher BIK band and we’re lumbered with higher tax bills. UK gov are being lobbied by the motor manufacturers (as company drivers are a big part of UK vehicle sales) - but they have bigger issues at the mo.

We’re all doomed !

z

[andy armitage]

I agree we are doomed :)

[MMC]

Same situation here. I’m due to change in Feb 2019 - so need to order in December.

My Jag XF has jumped a few bands in BIK under new WLTP rules, so its no longer an option.
I’m awaiting release date of the new Lexus ES hybrid (basically a Camry with a Lexus make over )
Predictions are that it should be around 110g/km and no 4% diesel surcharge.
It arrives in UK Q1 2019. So for me it makes it a possible (if boring) option...

The alternatives are the smaller Lexus IS300h - had one before - nice but a little uninspiring.
Mitsubishi PHEV - but I’m not convinced by build quality - other owners I know have not been impressed.

Or or suck it up & take a Mercedes E220d or Volvo S90 D4 - both around 122g/km.
...but I’d have to pay >£300/month for those

Any other suggestions very welcome.

z

"Tax doesn't have to be taxing."

My arse.

[neillp]

Don’t rule out the plug in hybrid cars I have a Passat GTE and find it really nice. £1 a day to charge or don’t charge at all and you can still get 40mpg or above.
Sadly I don’t think the GTE is available anymore but there are others of a similar fashion. BIK is crazy low.

[andy armitage]

If I get a plug in hybrid my company won't reinburse me for the electric I use at home to charge it as they say the inland revenue doesn't view electric as a fuel so I would have to foot the charging bill myself which puts me off a plug in hybrid as why should I pay to charge it, my new car renewal has come too early as nothing is in place to deal with these issues!

[boundary546]

I’ve had a company car for the past 20 years, the last 2 cars being Audi Q5’s.
I went to look at new Q5’s in July this year and fell in love with the SQ5. I was almost placing the order there and then but thought I’d better go back to my office and look at the BIK. Good job I did, it worked out at somewhere north of £500 per month !
I ended up buying it personally and can claim back mileage allowance from the company, if I take into account the income tax I was paying on my 3 year old Q5 diesel I only need to claim around 12k miles per year to cover the cost. I’ve had the SQ5 for 3 months now and it still makes me grin every time I drive it.
So, will your employer give you the option of opting out of a company vehicle ?

[andy armitage]

Don’t rule out the plug in hybrid cars I have a Passat GTE and find it really nice. £1 a day to charge or don’t charge at all and you can still get 40mpg or above.
Sadly I don’t think the GTE is available anymore but there are others of a similar fashion. BIK is crazy low.

The Golf and Passat are not available to order until later next year so that leaves a dreary choice of a Kia Niro and Hyundai ioniq with the plank of wood across the rear window!
Also I wouldn't say the BIK is crazy low on those cars either!

[zelig]

Don’t rule out the plug in hybrid cars I have a Passat GTE and find it really nice. £1 a day to charge or don’t charge at all and you can still get 40mpg or above.
Sadly I don’t think the GTE is available anymore but there are others of a similar fashion. BIK is crazy low.

That’s the issue. Most PHEVs have been withdrawn pending a new model - presumably that will perform better under the new WLTP regs ... but there’s very little choice (certainly not in the segment I’m looking at) at this moment.

z

[triumph coupe]

So, will your employer give you the option of opting out of a company vehicle ?

^^this

I had company cars for nearly 20 years. Opted out recently and this allowed me to choose a car I wanted rather than a car that balanced CO2 emissions and specification.

Now I claim a mileage rate and pay no company car tax. Better off and smile more. I calculated what the tax would be on my current car and it was north of £600.

Worth considering all options.


Sent from my iPhone using Tapatalk

[Chris_in_the_UK]

Can you go for a car allowance instead?

[demonloop]

Ford Ranger (or equivalent pickup) BIK is negligible and it’s surprisingly nice to drive.

It’s not like driving a car of course, but saves me a packet.

[andy armitage]

Can you go for a car allowance instead?

I don't think that would be an option as they lease our company car and everything including diesel is paid for by my employer

[hhhh]

If I get a plug in hybrid my company won't reinburse me for the electric I use at home to charge it as they say the inland revenue doesn't view electric as a fuel so I would have to foot the charging bill myself which puts me off a plug in hybrid as why should I pay to charge it, my new car renewal has come too early as nothing is in place to deal with these issues!

I have the Mitsubishi Outlander PHEV purely for the low BIK, plus I needed a biggish car for carrying sports kits/passengers at weekends. I also benefitted from the government subsidy, and continue to enjoy zero tax and zero congestion charge.

It also heaves around lift motors and gearboxes, scaffolding, tackles etc when required. I’ve done 90,000 mikes in 3.5 years and it’s never missed a beat. I’m on my 3rd set of tyres and only just had my second set of discs/pads fitted. Despite the abuse the interior still looks like new apart from some creasing on the drivers seat. I can never be bothered to plug it in to charge so run it as a normal hybrid, but obviously still get the low BIK rate. The regenerative braking is really efficient at putting charge into the battery as you drive.

Its also a decent 4x4, and has a diff lock, so is excellent in the snow.

Its not a car to move the soul, but it will move everything else without any fuss.

I’m just about to replace it with the new model which has a bigger, smoother engine but even lower emissions.

For me, nothing else on the market comes close at the moment, in terms of overall costs, practicality and reliability.

[andy armitage]

I have the Mitsubishi Outlander PHEV purely for the low BIK, plus I needed a biggish car for carrying sports kits/passengers at weekends. I also benefitted from the government subsidy, and continue to enjoy zero tax and zero congestion charge.

It also heaves around lift motors and gearboxes, scaffolding, tackles etc when required. I’ve done 90,000 mikes in 3.5 years and it’s never missed a beat. I’m on my 3rd set of tyres and only just had my second set of discs/pads fitted. Despite the abuse the interior still looks like new apart from some creasing on the drivers seat. I can never be bothered to plug it in to charge so run it as a normal hybrid, but obviously still get the low BIK rate. The regenerative braking is really efficient at putting charge into the battery as you drive.

Its also a decent 4x4, and has a diff lock, so is excellent in the snow.

Its not a car to move the soul, but it will move everything else without any fuss.

I’m just about to replace it with the new model which has a bigger, smoother engine but even lower emissions.

For me, nothing else on the market comes close at the moment, in terms of overall costs, practicality and reliability.

I did consider one but they are a bit too expensive at around £37000 also I did read reviews that said interior and the satnav screen were really dated with poor graphics etc and I did chat to an owner recently and he said the mpg was appalling on it so it really put me off

[hhhh]

I did consider one but they are a bit too expensive at around £37000 also I did read reviews that said interior and the satnav screen were really dated with poor graphics etc and I did chat to an owner recently and he said the mpg was appalling on it so it really put me off

Its fair to say the interior is more functional than luxury, it’s certainly no Bentley, but the seats are comfortable, and the plastics are solid enough. Nothing has cracked or broken and everything still works. It has heated leather seats, sunroof, decent stereo, dual zone climate, cruise control,Bluetooth phone/music all as you’d expect, and is generally an airy and pleasan5 place to be (my commute is the western stretch of the m25 then down the M3 so can be anything from 45 minutes to 3 hours). Haven’t really noticed poor graphics on the sat hav, but I tend to use Waze. I would say it does take a bit of time to load everything up, but there’s a lot going on.

Not plugging the car in, I would say It averages around the high 40’s MPG, which isn’t stellar but certainly not bad for a largish 4x4.

When I first go5 it and was enthusiastically charging it over night, it was reading about 90 mpg for my 40 mile journey to work.

[andy armitage]

Its fair to say the interior is more functional than luxury, it’s certainly no Bentley, but the seats are comfortable, and the plastics are solid enough. Nothing has cracked or broken and everything still works. It has heated leather seats, sunroof, decent stereo, dual zone climate, cruise control,Bluetooth phone/music all as you’d expect, and is generally an airy and pleasan5 place to be (my commute is the western stretch of the m25 then down the M3 so can be anything from 45 minutes to 3 hours). Haven’t really noticed poor graphics on the sat hav, but I tend to use Waze. I would say it does take a bit of time to load everything up, but there’s a lot going on.

Not plugging the car in, I would say It averages around the high 40’s MPG, which isn’t stellar but certainly not bad for a largish 4x4.

When I first go5 it and was enthusiastically charging it over night, it was reading about 90 mpg for my 40 mile journey to work.

Sounds ok and I know it's got good spec but the entry model will probably be too expensive and I do struggle with base models :)

[JPCain86]

I am in a similar situation. Our current car list really is poor.

We have the option to opt out where we get £6k pa (pre tax) and will save around £300 per month in company car tax. I think I will do this option and choose my own car. Still need to do the maths though.

[Chris_in_the_UK]

If you only do business miles, why are you getting hit with BIK?.

[reggie747]

If you only do business miles, why are you getting hit with BIK?.

I think he said he takes it home ? I'm hardly an expert I will say but does that count as a perk even though he may not want it that way ?

[andy armitage]

If you only do business miles, why are you getting hit with BIK?.

Exactly my point and this is where the system sucks as when I get home I park the work car and use our own car for private miles but because the car is at home it is classed as a benefit and there to use if I want to! What a shit system it is.

[Gav]

Exactly my point and this is where the system sucks as when I get home I park the work car and use our own car for private miles but because the car is at home it is classed as a benefit and there to use if I want to! What a shit system it is.

The system has always been this way. If the car is available for private use then it attracts the BIK charge. Whether you choose to use it for private use is a personal choice. Travel from home to work is generally considered to be commuting and as such is private mileage. Use your own vehicle and claim a mileage allowance if you do not wish to incur the charge

[andy armitage]

The system has always been this way. If the car is available for private use then it attracts the BIK charge. Whether you choose to use it for private use is a personal choice. Travel from home to work is generally considered to be commuting and as such is private mileage. Use your own vehicle and claim a mileage allowance if you do not wish to incur the charge

I know the system is that way but as I do 25000 work miles a year using my own car isn't an option so I have to incur the charge but it still pisses me right off when I never use it for private miles!

[Barton Red]

Ford Ranger (or equivalent pickup) BIK is negligible and it’s surprisingly nice to drive.

It’s not like driving a car of course, but saves me a packet.

If it’s just for work a “van” should be an option. There are plenty of car derived vans if you don’t fancy a pick up, any significant personal use and you’ll get hit with a much lower BIK.

If you really need a 4/5 seat car and it’s only for work talk to the company accountant. For example, if it’s only used Monday to Friday and left at the workplace (ie not available for personal use) it’s unlikely toudcbave any additional tax.

[Olic]

I currently have a 5 series estate for another year, which is circa £340 pm.

A colleague has just got a Nevara from a RR Evoque, these "trucks" seem to be one of the last "loop holes."

I believe they are fixed cost at £110 pm regardless of spec, price etc. Saw a Mercedes one the other day, that looked ok.

I have yet to see him, to ask how he is getting on with it though.

[IAmATeaf]

I know the system is that way but as I do 25000 work miles a year using my own car isn't an option so I have to incur the charge but it still pisses me right off when I never use it for private miles!

Why don’t you in that case drive your own car to work and then use the company car, then the reverse in the evening. Might be a pain to do but then it could really be regarded as a pool car.

Would getting a van be treated differently from a tax point of view?

[Gav]

Why don’t you in that case drive your own car to work and then use the company car, then the reverse in the evening. Might be a pain to do but then it could really be regarded as a pool car.

Would getting a van be treated differently from a tax point of view?

For it to be a pool car the following need to apply

the car was used by two or more employees, by reason of their employment
the car was not ordinarily used by one of those employees to the “exclusion of others”
any private use of the car made by each of the employees was “merely incidental” to each employee’s other use of the car in that year, and
the car was “not normally kept overnight” at or near any of the employees’ homes (other than at the employer’s premises).

[zelig]

I currently have a 5 series estate for another year, which is circa £340 pm.

A colleague has just got a Nevara from a RR Evoque, these "trucks" seem to be one of the last "loop holes."

I believe they are fixed cost at £110 pm regardless of spec, price etc. Saw a Mercedes one the other day, that looked ok.

I have yet to see him, to ask how he is getting on with it though.

Our field service engineers have twin cab pick ups - as they need to carry gear. Many of them are very happy with models from Ford & Nissan. The Mitsubishi pick ups we’ve had have had lots of issues.

Unfortunately, our company policy does not allow sales & marketing types to have them.

again

z

[MrMater]

I don't think that would be an option as they lease our company car and everything including diesel is paid for by my employer

Are you assuming you can’t opt out or has your company actually said you can’t? My company didn’t advertise the fact but when I asked HR they said no problem

My company works exactly the same as yours but opting out is an option for some. You can also choose to either pay for all fuel and claim your business mileage back or keep the company fuel card and pay for private mileage (which for you would be nil).

Keeping the fuel card protects against big increases in petrol prices (which happened to me the first time I opted out, price doubled in 6 months!).

I’m back in the company scheme now but only because my company recently decided to stop group 1 car list users opting out, otherwise I would have.

You need to do the maths though, and there are pro’s and con’s:

Pro’s - no BIK (or fuel benefit tax if you don’t use a fuel card)
- usually means more freedom of car choice and spec
- you can swap it any time you like rather than being stuck with the same crap for 3 or 4 years

Con’s - you take all the risk/responsibility, i.e. if you prang it, you pay
- you have to pay to insure it and tax it
- you have to pay for servicing/tyres etc.
- you suffer the depreciation (if you buy outright rather than lease)


If you don’t know for sure about opt out availability then it’s worth asking. If they say no way then I’m afraid you’re stuffed like the rest of us 🙄

[demonloop]

I currently have a 5 series estate for another year, which is circa £340 pm.

A colleague has just got a Nevara from a RR Evoque, these "trucks" seem to be one of the last "loop holes."

I believe they are fixed cost at £110 pm regardless of spec, price etc. Saw a Mercedes one the other day, that looked ok.

I have yet to see him, to ask how he is getting on with it though.

Its £52.50 p/m if you're a 20% taxpayer :-)

[andy armitage]

Are you assuming you can’t opt out or has your company actually said you can’t? My company didn’t advertise the fact but when I asked HR they said no problem

My company works exactly the same as yours but opting out is an option for some. You can also choose to either pay for all fuel and claim your business mileage back or keep the company fuel card and pay for private mileage (which for you would be nil).

Keeping the fuel card protects against big increases in petrol prices (which happened to me the first time I opted out, price doubled in 6 months!).

I’m back in the company scheme now but only because my company recently decided to stop group 1 car list users opting out, otherwise I would have.

You need to do the maths though, and there are pro’s and con’s:

Pro’s - no BIK (or fuel benefit tax if you don’t use a fuel card)
- usually means more freedom of car choice and spec
- you can swap it any time you like rather than being stuck with the same crap for 3 or 4 years

Con’s - you take all the risk/responsibility, i.e. if you prang it, you pay
- you have to pay to insure it and tax it
- you have to pay for servicing/tyres etc.
- you suffer the depreciation (if you buy outright rather than lease)


If you don’t know for sure about opt out availability then it’s worth asking. If they say no way then I’m afraid you’re stuffed like the rest of us 

Thanks for that I know opting out would be a pain and I don't want that hassle so like you say I am stuffed like everyone else :)

- - - Updated - - -

Why don’t you in that case drive your own car to work and then use the company car, then the reverse in the evening. Might be a pain to do but then it could really be regarded as a pool car.

Would getting a van be treated differently from a tax point of view?

I live over 200 miles away from work :)

[Stefs]

I’ve been in the same boat. Fortunately I have an understanding boss and 3 years ago I swapped to an audi a3 etron and a couple of weeks ago I was lucky enough to get him to stump up for another plug in hybrid the merc c350e. You can always choose to ignore the plug in part but it does give you a really nice to drive car at about 35% of the co car tax. As mentioned... an understanding boss is a big help.

[Steve B]

Ford Ranger (or equivalent pickup) BIK is negligible and it’s surprisingly nice to drive.

It’s not like driving a car of course, but saves me a packet.

Just done this and although it's no where near as nice as the car I was driving it has saved me £300+ per month.
The Ranger is a beast, 3.2 litre auto with CO2 emissions off the scale but for £100 a month BIK.......

[jordan-arch]

The options as discussed are either a semi commercial vehicle, pick up or small van or a hybrid, the plug in hybrid will probably give you the best bang for your buck, the fact work won't pay for you charging it at home is a minor issue in my eyes if it saves you a significant amount each month in tax, still going to be a net gain to you.

The van will be more compromised as a driving experience, but they will almost certainly have enough of the standard creature comforts to make the slog easy enough.

[IAmATeaf]

I think pick up with a double cab if available would be a good compromise?

[andy armitage]

Haha thanks for the pick up suggestions :) but I am a sales rep on the road so a car is the vehicle I need I went to look at a Prius yesterday (don't laugh) it sort of seemed ok inside but my god it's an ugly mother and my lease company said the plug in version isn't stacking up number wise but I can have the top of the range in the petrol hybrid so I will save money but not as much and to be driving a Prius I need to be saving a lot in bik otherwise I don't know whether I can be seen in one :)

[andy armitage]

The options as discussed are either a semi commercial vehicle, pick up or small van or a hybrid, the plug in hybrid will probably give you the best bang for your buck, the fact work won't pay for you charging it at home is a minor issue in my eyes if it saves you a significant amount each month in tax, still going to be a net gain to you.

The van will be more compromised as a driving experience, but they will almost certainly have enough of the standard creature comforts to make the slog easy enough.

I think you're right there re work not paying me for charging at home as the hybrids don't have a long range anyway I could get the ioniq plug in but I am not sure I could cope with that stupid rear spoiler in the glass, and I do think the Prius will be a superior car even if I have to get the petrol hybrid!

[zelig]

I test drove the Mitsubishi Outlander PHEV this afternoon.

Not bad - interior is ok if a little agricultural. Nice touches with leather trim can’t hide the old school infotainment and switchgear - but it was all pretty solid.

However, the dealership had cunningly emptied the tank - so my 20 min test drive was all electric & while it was impressively capable on electric only (even up to 70mph) I’d really want to try it on petrol-electric mode before making any decision.

At 40g/km It would save me quite a bit in BIK.
So I could forgive it a few niggles.

z

[Chris_in_the_UK]

I test drove the Mitsubishi Outlander PHEV this afternoon.

Not bad - interior is ok if a little agricultural. Nice touches with leather trim can’t hide the old school infotainment and switchgear - but it was all pretty solid.

However, the dealership had cunningly emptied the tank - so my 20 min test drive was all electric & while it was impressively capable on electric only (even up to 70mph) I’d really want to try it on petrol-electric mode before making any decision.

At 40g/km It would save me quite a bit in BIK.
So I could forgive it a few niggles.

z

I found it...lacking TBH.

[andy armitage]

I test drove the Mitsubishi Outlander PHEV this afternoon.

Not bad - interior is ok if a little agricultural. Nice touches with leather trim can’t hide the old school infotainment and switchgear - but it was all pretty solid.

However, the dealership had cunningly emptied the tank - so my 20 min test drive was all electric & while it was impressively capable on electric only (even up to 70mph) I’d really want to try it on petrol-electric mode before making any decision.

At 40g/km It would save me quite a bit in BIK.
So I could forgive it a few niggles.

z

I spoke to a guy in a Tesco car park who had one and he said whatever you read the mpg is horrendous you will be constantly filling it up!

[zelig]

I found it...lacking TBH.

Indeed. Not perfect by a long way.
But if it’s saving me £200/month I would still consider it.

That’s worth a nice watch every year.


z

[andy armitage]

Indeed. Not perfect by a long way.
But if it’s saving me £200/month I would still consider it.

That’s worth a nice watch every year.


z

A guy at work had one and he said he hated it on many levels! No idea what he hated about it as he has left now.