Hypothetical BIK situation

Hypothetical situation......

I have a salary currently but no company car. If I was to convert some of my salary to pay for a company car would I negate the BIK by being seen to contribute to the running costs....


eg - Salary 80K

Take reduction to 70K

Car costs to employer -10K pa

Car valued 40K x 30% - 12000

BIK - Contribution = 2000

Taxable BIK = 2000

Tax now paid on 70K + 2k notional = 72K

Is this legitimate....?

Yes.

http://www.askaboutmoney.com/showthread.php?p=850143

how would you be allowed the contribution to be pre-tax, surely the contribution would be 10k out of after tax income

Just to revive this with a new slant.

It seems clear that you cant forgo before tax......


Is the following a company car ...... or a 'director loan' and how would it be treated for BIK purposes.....

I am converting some of my salary to cover the provision of a company car....however the contract with the car company is in my personal name...I am providing the deposit and the company is paying the monthly finance amount on my behalf.

I am also fuelling, insuring and maintaining the car completely....

So...am I being provided with a company car or am I simply recieving a 'directors loan' ( I am a director of the company but not a proprietary director)


I understand I can reduce the BIK by the amount that I contribute to the running costs so that is not a fact - really it is just a question of whether or not the company is actually providing me with a company car ?


Hope that's not too confusing.