Company Car Confusion

[helpasisterout]

Hey posting for traffic

I work in a sales role and I have a company car which I am allowed to use for personal use I just pay for the miles I do in my own time and it comes off my salary plus the monthly fee for the car.

We are ttc#1 and trying to save some money and wondered if I need to budget to buy a car of my own or do I keep the car? What happens with the tax I pay as it's quite expensive per month?

I would ask my HR Contact however it is a tiny company and they have never had someone in my role before potentially seeking maternity leave so could all be a bit disorganised at best.

Getting ahead of myself I know but like to budget.

Thank you

In my company you can either choose company car or have car allowance, i chose the allowance and im currently on Maternity leave and still get my allowance.

I assume you would be able to keep the. Car whilst on Maternity. Check with manager or HR

Going back a few years but I think I was allowed to keep my company car on mat leave but I had to pay for it still out of maternity pay. I think if it's a contractual benefit they can't take it off you but they may have get out clauses around discretionary benefits so could.

I had a car allowance rather than a company car so I got a payment every month to put towards a car and I had to use it for work too. They could not remove that during my mat leave as it is classed as a perk of the job so I kept getting paid the money which was a great addition to mat pay.

However your company are screwing you over, you pay for the “luxury” of having a company car in your tax and so the only thing you should have to pay at all is the petrol you use when not driving for work. They can’t take your car or laptop off you when on mat leave.

Sorry missed the part you said you checked. Either way its their Job to sort this out so maybe mention it to them

I'd put the difference between actually running a car and the cost to you of the company car into a savings account for when you do need a car
You will keep the company car during maternity leave, (just saying in case you didnt realise this)
Work out how much a car would cost, so purchase price, fuel, insurance tax and repairs, then deduct how much it costs you in private miles and tax and see the difference!

Your car should have a taxable value which should be deducted from your personal tax allowance meaning you pay tax on less than usual - at least that is how it worked with my company car. It had a taxable value of £1950/year so my personal allowance went down from £11,800 to £9850 and I paid tax on all income once I reached the threshold. When I handed the car back on leaving the company in September the tax office recalculated my personal allowance and, as I’ve not worked since then, I will be due a tax refund for the time I was working.

Whether you keep the car while on maternity leave will depend on the company’s policy which should be in the staff handbook for company cars and how they view long term leave. If there’s nothing written about it you should ask whoever is responsible for company cars.

www.workingfamilies.org.uk/articles/a-mothers-rights-during-maternity-leave/

The link might help.

i kept my company car during maternity leave. Both times the comps h stopped taking out my personal contributions when I went on reduced pay. The first time I repaid in a lump sum when I returned to work. The second time I repaid in monthly instalments taken out of my salary over a year.

As I understand it, you should be allowed to keel your car, otherwise it is discriminatory to pregnant women (I don’t now if the introduction of shared parental leave has affected this).

Why don’t you ask your HR people what your company policy is ?

Your car should have a taxable value which should be deducted from your personal tax allowance meaning you pay tax on less than usual - at least that is how it worked with my company car. It had a taxable value of £1950/year so my personal allowance went down from £11,800 to £9850 and I paid tax on all income once I reached the threshold.

This means you pay tax on more than 'usual' if usual is the personal tax free allowance. It is the tax free allowance that goes down, the taxable income goes up.

There is 2 elements to company car tax;

• car benefit. You are taxed on this based on the list price less any contribution you make.
• fuel benefit. You are only taxed on this if you are provided with fuel for private journeys (includes home to work commuting).

By covering the cost of her private journeys the OP won't be taxed on the fuel benefit element.
An alternative is to pay for all fuel personally and claim company car rate mileage for the business miles.

It's up to the company what they offer revarding with this but it isn't "screwing you".
The cost/benefit implications depend on the level of private mileage anyway.

Basically if it's on your P11d as a taxable benefit (car, fuel card, private healthcare for example) you are entitled to retain that whilst on mat leave. If the business feels that they need to car for the business- i.e for your mat cover to use, then they may propose you take an allowance instead but this is up to you to negotiate. If you won't need a car on mat leave this could be better than paying the tax on it.

Employers can request none taxed company equipment such as company mobiles, keys and laptops back.

Wow thanks everyone for your replies. I thought it would be very much black and white but it seems that hopefully when the time comes I'll have a few options to discuss with my boss and HR.

Thanks again!

In my experience it’s totally black and white. You keep the car. You pay tax on it but may get a rebate later etc depending on your pay during Mat Leave, whether it’s SMP or whatever.

If they need your car, you can negotiate an allowance but that’s unlikely in my opinion.

You should be allowed to keep it on ML as it s part of your salary package.