It's not that simple - if you are doing low milage on a company car you get crucified for BIK.The general rule is that if you're doing alot of mileage, it's better to use your own personal car. If you're doing low mileage it's better to use the copmany car.
Yeah, but do you really want/need to run the same car?I would almost always recommend a company car.
If you calculate the BIK which you would pay (even with low business mileage), you would never run the same car personally for less.
It's not that simple - if you are doing low milage on a company car you get crucified for BIK.
Actually no, it's not a general rule. If you have low mileage, you will get hit heavily with BIK.General Rule
If you are buying the car personally, you have a lot more options about the car you are going to buy, and how long you choose to keep it. If you get a company car, you will generally be getting a brand new car (and paying BIK on this value), and getting it changed every three years (and paying BIK on the value of the replacement).How is it better to buy the car personally when you would have had to use after tax earnings to buy the car!!
Thats always a point missed in giving advice.
Actually no, it's not a general rule. If you have low mileage, you will get hit heavily with BIK.
Surely company cars are a better option with high mileage rather than low mileage users. The big costs are the car itself and the insurance. These are pretty-much fixed costs, regardless of usage. Fuel is the big variable costs, with repairs and maintenance related to usage also.Actually no yourself. BIK is dependent on the value of the car. If the mileage is low, the cost of insurance, car tax, fuel, repairs and maintenance generally outweighs the BIK.
Surely company cars are a better option with high mileage rather than low mileage users. The big costs are the car itself and the insurance. These are pretty-much fixed costs, regardless of usage. Fuel is the big variable costs, with repairs and maintenance related to usage also.
So the big costs stay the same, regardless of usage. For high business mileage users, the BIK is cut out, making the car better value. I'm confused as to why you single out low mileage users as getting good value.
If you are buying the car personally, you have a lot more options about the car you are going to buy, and how long you choose to keep it. If you get a company car, you will generally be getting a brand new car (and paying BIK on this value), and getting it changed every three years (and paying BIK on the value of the replacement).
If the mileage is high, the mileage expense claims will outweigh the running cost of using your car. e.g. running costs say €5K, expense claims €8K. Individual is €3K better of for using their own car rather than take the company car option.
If the mileage is low, the running costs will outweigh the BIK e.g. running costs €5K, tax on BIK €2K, potential mileage expenses €4K. Individual has the use of a company car at a cost of €3K BIK per year as opposed to using their own car at a cost of €5K per annum.
If they opted to use their own car and charge mileage, they would only be entitled to €4K in mileage when it would cost them €5K in running costs.
And what about your simplistic reply which ignores BIK?Your reply did not encompass any tax consideration and is way too simplistic. My question was actually a leading one - to use after tax earnings to buy a car is ridiculous if you have the option of a company car. Running costs would also need to be paid out of after tax earnings aswell.
Both of these scenarios ignore the concept of having to pay for the car and the running costs out of after tax earnings.
If the mileage is high, the mileage expense claims will outweigh the running cost of using your car. e.g. running costs say €5K, expense claims €8K. Individual is €3K better of for using their own car rather than take the company car option.
If the mileage is low, the running costs will outweigh the BIK e.g. running costs €5K, tax on BIK €2K, potential mileage expenses €4K. Individual has the use of a company car at a cost of €3K BIK per year as opposed to using their own car at a cost of €5K per annum.
If they opted to use their own car and charge mileage, they would only be entitled to €4K in mileage when it would cost them €5K in running costs.