Confused with company car/BIK

J

jonny330

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I'm about to start a new job with a company that involves me being on the road everyday calling into retailers that deal with this companys products i.e. a sales rep.

My salary will be €30,000 and I will also be getting a company car (don't know what it is yet or don't know if I have to take it). I already have a car, a 06 Ford Focus, and was thinking about selling this and just using the company car. I only bought it a few months ago and pay €100 a week on the 3 year loan that I have so I would be saving alot of money if I sold this and used the company car.

However, I'm not sure if this is the right thing to do. Obviously I'll be saving alot of money by not having the Focus - I can clear the loan with what I get on the sale and I won't have to pay €100 a week loan repayments, insurance, tax and petrol. But how much BIK will I be paying? Can I use the company car outside of working hours for personnal use?

If they offer me a car allowance to continue using my Focus would this be better? Its only new and I'd hate to wreck it calling into different shops each day, increasing millage/ depreciation, dents and scapes (its a black car!) and leaving it around the city centre each day. At least with a company car it wouldn't bother me too much if it got wrecked (or stolen!).
 
You will have to pay BIK on your company car, this will be 30% of the OMV of the car at time of purchase every year. So say car cost 15,000 you will be taxed as if you are on a sallary of 30,000 + ( 21,000 *30%). This 30% will be reduced by % depending on the amount of millage you will do. ?If you are a rep in Dublin I think you get max relief on the 30% ( don't know the exact but I think you will reduce the 30 % down to about 6%) if you are out of the office for greater then 75% of the time i.e stuck on the M50 for most of the day.

The calculations are fairly easy to work out once you know the car you are getting. As a rep and not having the exact figs I would assume you will be better off with co car. Your new emploer will be able to tell you your expected millage and type of Car they offer.

Think
Petrol
Insurance
Depreciation
 
Check out http://www.revenue.ie/ and search under BIK.
How much you pay depends on a lot of factors - your mileage (business); any payments you make yourself etc.
Basic example:
You get €30k OMV (the original market value, including VRT, VAT etc) car and don't pay anything towards it. You do under 15k business mileage. 30k * 30% = €9k. Your salary is increased by €9k for tax purposes. Every year you pay tax (according to your mileage) based on the OMV of €30k. So despite the fact that after 2 years the car is only worth around €15k (say), you still pay tax on it as if it's worth €30k.
So it's best to change your Co car as often as possible to get the value out of it.
The Allowances might work out better - but it obviously depends on how much they're willing to pay.
Overall, even though a company car does cost you in tax, it can work out cheaper than you buying the equivalent car yourself (and taxing/servicing/repairing etc etc).
 
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