Company car - cost of BIK

T

Tammy123

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Looking for some help in deciding whether to take a company car or a car allowance.

The car allowance will be about 12k annually, or a car valued at this times the number of years I commit to keeping it for (ie 36k if I keep it 3 years). I currently do less than 10k miles per year and pay tax at the top rate.

I'm trying to calculate what I would pay in BIK on a car of c. 36k, if the choice of car will make a difference under the new car tax rules, versus just taking the car allowance and buying (taxing, insuring and maintaining) a car myself (probably second hand).

Thanks for any help.
 
I presume the 10k miles are all personal. If so then they are not relevant for the BIK calculation.
A car with list price of 36k car will add 9720 to your taxable income each year as follows:

36000
less 10% discount allowed by revenue
32400x30% = 9720 extra taxable income.

The car allowance will obviously add 12000 to your taxable income.

Tax differential then is (12000-9720=2280) x 47% = 1072 ( approx as depends on where your prsi cut-off point is)

Unlikely you can buy and run a car for this so the company car is best option.
Company car has substantial non-financial benefits as well. No worry about it being scraped in car park/stolen/repairs etc
 
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