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Company Car Tax

(9 Posts)
Nina35 Tue 12-Apr-16 02:07:47

Hi, My OH has just got himself another job where he will be given a company car. His wages now are only slightly higher than the job he has left, £500 more per year. He used his own car when needed with business insurance and claimed
expenses back, this worked out well.

We have never had a company car before and dont understand how it will effect us financially. Only he drives and as we have 4 children, we will still need to keep our 7 seater running as we will never all fit in a 5 seater.

I am also a full time mother, so only he works and our family income is topped up each month as we recieve family tax credits.

He has given notice a few weeks ago and is starting his new job next week, he is now so worried on how this company car will effect our income. I am told that he will have to pay for all his fuel.

How will this effect his tax that he pays each month, last year he paid about £3,500 tax. Please can someone advise if we get more family tax credits to make up for the extra tax he will be paying. We dont need the car but have no choice!

The job comes with a car, so if he refuses the car there will be no job. Please help?

marsybum Tue 12-Apr-16 02:37:51

I'm no expert but I believe if you don't use the cat for personal use you don't pay tax? There's a calculator of you do pay tax on the website (on my phone so can't c&p, I Googled ) that should give you an idea maybe, then use to calculate the take home pay. I beleive tax credits are on gross not net pay so I don't think you'd get extra? can do a calculation. Hope that helps smile

Out2pasture Tue 12-Apr-16 03:00:12

Nina35 Tue 12-Apr-16 09:43:21

Thank you for you reply's

AnchorDownDeepBreath Tue 12-Apr-16 09:48:44

Is he really sure that he can't reject the car?

They are an incentive, but they aren't usually forced. I never take company cars because I can't drive much of the time, and I have a car anyway - I've never had an employer mind. You just sign some paperwork saying that you're taking an allowance instead of the car.

If that's really not possible, you'll only pay tax if the car is used for personal usage. Unfortunately, that includes commuting, so it's likely that it will be classed as being used for personal usage. There's a calculator on the Gov website which will tell you how much it'll cost.

I think Marsy is right about tax credits, I don't think they'd increase.

Julieb85 Tue 12-Apr-16 17:19:53

Use the HMRC calculator to find out the cost of the's based on engine size and CO2 emissions. Basically the cost of the car benefit is deducted from his personal tax free allowance (ie tax code is lowered). His company should submit the info to HMRC within 3 months of him getting the car, so with Real time info at HMRC you'll probably see the change from pay month 4.

BarbaraofSeville Fri 15-Apr-16 09:58:46

Can they supply a 7 seater company car? He can't be the first person at the new company to have 4 DCs? You could then sell your existing car and only run one car.

Otherwise, you will have the cost of running 2 cars and sadly you will probably be worse off because he will pay extra tax on the company car whereas previously the cost of his one car will have been subsidised as the expenses paid should have covered all costs not just fuel (most companies pay 45 pence a mile and fuel is about a third that or less).

How much better is the new job - does it offer better prospects, better hours or closer to home? Are his old employers sad to see him go? If the car issue cannot be overcome, could he stay at his old employers? Maybe they could offer him a pay rise - many employers will do that if they want to keep somebody.

Kanga59 Mon 18-Apr-16 22:36:49

If you take the car you will need to tell tax credits. because it's a taxable benefit that they take into account

BigginsforPope Fri 22-Apr-16 08:32:23

In my experience your tax credits will reduce slightly due to the car. We have four dc and now we only have a five seater company car which is a struggle sometimes. Just having a company car is more affordable as although your tax free threshold is reduced you have no maintenance to worry about. We only pay for personal mileage which does include the commute. There was no option for us to have a seven seater company car.

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