Work benefits- free car wwyd?

[Boxshibe]

DH started a new job recently and one of the benefits is a car/motorbike. He works in car manufacturing in IT. One of his work benefits is he can lease a car and insurance from work for free.
Now neither of us drive - he can't and I don't have a current licence. As we lived in London for a long time this wasn't a problem. Now we've moved to a village close to my parents and dd1 will be 17 soon it makes sense to sort this out.
So the plan is I get a new license and we get lessons for dh and dd1.
He gets points towards this so we could get anything from a basic hatchback to a suv or electric suv and anything in between. Or a motorbike.
It feels stupid not to use it and we'll never be able to afford a brand new luxury car so we should just get licences?
Wwyd?

Well, the fact that none of you have a license or can drive🤔...but that aside, it's not really free...it will fuck up his tax code, especially if he uses it for private mileage only.
Do some proper calculations before you take it on...and some lessons.

Yeah, he'll get taxed on it as a benefit in kind, so do the maths first to see if it's worth it, or whether you would be better buying a cheaper car.

Its not free - its a taxable benefit. He will extra income tax for having the car.

However what you pay in tax is less than what it costs to buy, tax, insure and maintain a car - so it is worth it.

Ok explain more. How will it fuck up his tax code? I understand its a free benefit. The company would own the car we can change it every 18 months.

All of you should sort out licences regardless.

It won't 'fuck up' his tax code.

What it will do is change his tax code as he will have to pay tax on the benefit.

I had a company car until about a year ago and I paid about £150 a month in tax for it.

Here is some more info www.gov.uk/tax-company-benefits/tax-on-company-cars

Do phone HMRC as soon as you take receipt of the car to declare it so that he starts paying tax immediately. You don't want to get into arrears on it. Its your responsibility to tell HMRC. Your employer wont do anything till the end of the tax year.

Do you realise how expensive lessons are? Easier said than done

www.gov.uk/tax-company-benefits/tax-on-company-cars

It's treated as income (even though it's free) so taxable. This gives an explanation: www.buyacar.co.uk/cars/economical-cars/1887/benefit-in-kind-car

If you have a company car you pay income tax on the value of the perk - the amount of tax varies depending on how many business miles he does each year.

It is cheaper than privately leasing a car but it is definitely not free. He should ask hr for an illustration of what his tax will be if he takes the car

Your DH's employer must have some documentation explaining the scheme in full - read this before you make a decision.

It's probably worth doing, but it won't be "free".

Usually, the use of the car is counted as part of an employees income for the year and they have to pay tax on it. It’s worth clarifying how much tax he would pay before agreeing to it!

www.gov.uk/tax-company-benefits/tax-on-company-cars

Thanks. We need to think about it. Work is a 10 min bus ride or 30 min walk. He gets paid £45k so under the 40% tax. They won't pay fuel. The car would solely be for personal use.

Isn't there an option to take the car allowance in cash instead? That's how it works in my company.

We had them for a few years through my husbands job and they are very strict with wear and tear and any knocks, chips to paintwork and you can end up with quite a big bill when you hand it back!

No as he can get a car worth £100k. I think some more info is needed.
He has x points it can go towards 5 motorcycles. 1 electric suv. Or a mix to lower end cars + motor cycles.
Idk.

Get one. Like others say, it's not free exactly but it's much cheaper than buying and servicing your own car. But do try to get a lease car paid for buy the company not a car allowance m.

We moved from a really connected part of London to a southern suburb last year. Everything is a 15 minute walk away now. I dusted off my driving license and it's totally worth it.

Unfortunately my husband changed job snd lost the car lease. He now gets an allowance and we've had to buy one.it's so much more expensive plus we have to pay for all the servicing etc.

Are you sure someone else can use the car? I’d have thought if it’s your DH’s benefit, it would have to be in his name with his driving licence details and if he doesn’t have one?

A relative had a company car and he had to be the main insurance holder. You can’t get insurance if you don’t have a licence

The company owns the car but it gets used for non business purposes. (Including commuting to work)

If he had a company car or van used for business only then it would have no effect

If he had a company car or van that he can drive for personal journeys then that is a benefit

The key elements you have pointed out are ‘free lease’ (something that has value but is provided for free) and even the points that he earns for different levels

HMRC would see it as you having the benefit of use a vehicle.
(As it’s owned by the company / lease you also wouldn’t have the expense of servicing, maintenance, tyres etc)

Fuel is another matter - who buys it?
Does he or the company pay?
Does he account for private and business mileage?
Is there a travel claim made to pay him back for business mileage or a charge made for private mileage ?

HMRC will consider any private use elements to be a benefit, and will require income tax to be paid on the basis that it could have been paid as salary and therefore there would have be tax paid

Note that the recent court findings against Trumps businesses are for this sort of thing with undeclared personal benefits paid by company’s and the associated fraud / tax evasion

No it doesn't need to be him. he asked we could transfer it to my dad and it was allowed but he's just bought a new car. I understand its a weird benefit to add to their salary. An xK car is cheaper than paying them more.

It’s only worth it if you’ll use it. If you’re fine without a car at the moment do you want the expense of paying for it as a benefit?

My husband takes the cash alternative which bumps up his salary - every year!

He brought a new car and still makes money each year from the lump sum.

like others said - do the maths.

The car allowance cash equivalent isn't usually the cost of buying a car outright, it's roughly what you'd pay to lease it.

As my parents are getting older it is. I could drive to them 20 mins vrs 2 buses about 1.5 hours. And dd1 wants to drive when she's able. Also I have to go to work 4x a year it would take me 3 hrs vrs 5 hours in the train.

I can see that a run around for you and your dcs to learn in would be useful. You need to check the annual taxable value of, say a Toyota Yaris. Then your DS will pay 40% tax on that.

Eg if taxable value is £4k a year, your dh will pay £1.6k extra tax. So it would cost him £133 a month. Plus insurance, fuel, servicing etc