To ask DH to change jobs because of work car?

[itseasybeingcheesy]

I really don't know whether there's a better category for this but please do tell me if you're an Uber expert on tax and work benefits.

DH got a new job in January in the property sector he took it because there was talk of redundancies at his old job and because he really wanted to get into this branch of work and start a career.

The job involves a lot of driving. We weren't told much about the logistics of this other than you'll be covering this region and we provide the car, you get petrol and parking expenses back.

Fast forward four months, he loves job and is doing well. Makes bonuses every month. We are still struggling a bit money wise because I took a lower paid job to get out of a career that was making me ill. We get by but aren't managing to save. We have another baby on the way.

His work finally get around to telling him he needs to put the car in his name for tax as everyone else does and then call HMRC to tell them that. HMRC then immediately deduct about £5000 of his personal tax allowance and we are facing being a couple of hundred pounds worse off each month. Add to this that he only gets back 11p per mile on petrol and we are majorly in the hole on living expenses and struggling even more.

I'm super worried about finances and ask DH to start looking for another job to remedy this situation. He is gutted. Understandably. And is exploring transferring internally within his company but this kind of moves him to the side of the career he wanted.

AIBU? Any other solutions to this gaping hole in our finances other than changing jobs? Would appreciate the perspective of others who have to use a work car and the impact on their income.

@ReganSomerset actually I did realise that. Hence the fact of asking DH to change jobs.
However I wondered if I was over reactive and if there was in fact something else I could be doing to fix this. I think the general consensus is both that I am being unfair to ask him to change jobs and yet there's nothing else to be done.

I suppose I'll have to accept that I'm being unfair.

@TeacupDrama I've said a couple of times. He is not a higher rate tax payer. He earn half of that. We are in the north and this job is at the start of a career ladder that would take a while to come to fruit. Your workings assume he is on a salary that is in fact more than our household income combined

@ReganSomerset I'm really not sure how to go about picking up transcription work. I wouldn't even know where to start. Any pointers?

@itseasybeingcheesy company cars are not the wonderful perk that they were in the 80s as they are now so heavily taxed that you need to be driving around 20k business miles a year to make it worthwhile. I've certainly been shocked at how much my car has cost me in tax but I would never have had such a nice one if I'd had to buy it myself and am lucky that I've been able to withstand the decrease in income as it's been offset by not paying as much for fuel and car servicing, tax, insurance etc.

It would be worth getting the amount of tax your DH is paying for the car checked - HMRC are well known for getting codes wrong.

I know you realise you're in trouble, cheesy. I was using sarcasm to suggest to PP that it was an unhelpful comment for them to have made. Hence the sarcastic emoji >>

And for a final time, have you considered trying to earn some more money yourself? Such as by working from home in the evenings in addition to your current job?

I'm also confused how you are £400 a month worse off. As a couple of people have already calculated, his tax has only increased by £84 per month plus £130 in fuel (£200 less £70 reimbursement). Whilst this is not ideal, it's nowhere near £400?

Does he have an option for giving the company car back and taking a car allownace instead? i have a company car and the tax is a bit crazy but they pay for servicing / tyres / road tax etc so I personally am better off with the company car. I am allowed to opt for a £450 monthly car allowance and provide my own car.

Was the company car in the job offer? Company cars always come with big tax bills!

Company cars are not the great perk some think they are. Yes its great to have a car where you dont seem to pay for insurance, servicing, maintenance, new tyres and parts etc but you can pay through the nose in tax. Its classed as Benefit in Kind. Some companies give the option of a car allowance instead of taking the company car. It might be worth asking if this is an option.

@Blobby10 thanks I'll get him to call and double check the code.

@ReganSomerset what work would you suggest could be done on maternity leave? I've very often seem in threads people suggesting that other get this type of work but nobody seems to be able to state how you find such a job or where to start? All the work at home for mum jobs I know of are MLMs or require skills like another language or a teaching qualification.

Also sorry for misreading the sarcasm. I'm stressed out!

Read Teacup’s post again. You’re not losing 5k of income, you’re losing the tax free amount on that amount.

Also your DH should talk to his employer about being reimbursed exactly for petrol costs. Do they have a fuel card he can useZ. He shouldn’t be out of pocket for business fuel.

Would they be willing to give him a work van rather than a car? He won’t pay any tax on a work van, DH has a Navara and it’s classed as a van rather than a car. He also has a fuel card rather than claiming back mileage.

The figure I'm using is from entitled to's tax code net income calculator. Not me doing my own working as I wouldn't consider that reliable. We had already done the married people's tax transfer so this includes that.

your maths is wrong and you're also ignoring the key question someone asked upthread - is there a local office he can pick up the company car from as required so that he doesn't use it for any personal (inc commuting) purposes? in that case, it's not a taxable benefit.

He's going to have a meeting with his manager and see what can be done but I expect that the company might be reluctant to make any special arrangement for him that the aren't doing for the others in his job role.

PP is correct that you can minimise tax is the car is only for business use. This means he can’t use it for travelling to and from usual place of work. This is from HMRC for employers:

What's exempt

You must report the car or fuel to HM Revenue and Customs (HMRC) if they are provided as part of a salary sacrifice arrangement.

If you provide the car and fuel in another way, you might not have to report or pay anything. To be exempt, your employees must use the car or fuel in one of the following ways.

Cars available for business journeys only
Business journeys are either:

journeys that are part of your employee’s duties, eg a service engineer travelling to an appointment
journeys an employee has to make to get to a temporary workplace
To be exempt, you must tell your employee not to use the vehicle for private journeys and check that they don’t.

VapeVamp12 it's very unlikely that he would be better off even if his company did offer a car allowance. For a £450 monthly allowance (in your eg) he would lose 20% straight away in tax. £360 isn't much to lease a car (which would need a relatively high mileage allowance), run it and maintain it.

@PurplePiePete unfortunately not, his office doesn't have free parking so he would have to pay to park overnight which would cost approx £10 per day. I haven't sat down to do the working on that but at £50 a week it would be very costly on top of him paying for a train ticket home from work.

The next nearest office doesn't have parking all all because the whole area is residential permit only and none of the staff are allowed to bring their cars to work as the company won't buy permits.

if he is only on 20k my calculations are still correct you are £83 worse off a month not 400

your tax allowance is the money you can earn without paying tax on it
so if Dh is on 20k normally he would pay tax on just 8k which is 1600 or £133 a month
now his tax allowance is reduced to 7k he pays tax on 13k which is 2600 or £216 a month
ie it doesn't matter what your DH earns you are still £83 worse off a month unless he was earning under 12k

I know £83 a month is not nothing especially as on 20K but it is nowhere near as bad as you were imagining at £400 a month

Teacup is right. If his tax-free allowance has been reduced by 5000, this doesn’t mean he has to pay 5000, it means he has to pay tax on 5000. If he is earning well below the 40% threshold, then he is paying 20% on 5000 = 1000 a year in tax.

that's annoying. Since they're effectively making him take the company car that he doesn't want or need for personal use, there's nothing to stop him asking for a payrise to compensate for the tax position

Can't he give the car back and have a car allowance instead?

OP a few people have suggested he asks for a car allowance but it is possible that could make him much worse off than he is now (see my example above) so I'd think very carefully before he suggests that.

As you say, the company will have a travel policy that they may not deviate from as it sets a precedent for other employees but it's worth him meeting with his boss and discussing the issues he has. The other thing to bare in mind, some of the fuel costs that he cannot claim will actually be his personal commute costs that aren't reimbursed. Unless you have a job on your doorstep, there is always going to be some costs involved to get to work.

If you can type, you can transcribe audio files via the Internet?

Thanks Teacup. I'll look at the tax again. We will still be spending £200ish on petrol per month plus whatever we lose on tax. The main point being we were barely skating along before and with this change to personal tax we will have firmly tipped the balance into not breaking even any more.

I'm stressed to high heavens about it and know that DH is in a crap position as well.

I really wish that companies would be responsible for letting you know that if you have a work car it will affect our tax code and how much mileage they will give you. Neither were mentioned in his contract or at meetings before the start date. We would never have agreed to this.

OP

Stay with this. People who have been through similar are trying to help with good practical advice.

A car ends up in a scrap yard. It costs money to run an depreciates as soon as you buy it. Worse you are buying it with an expensive loan.

DH had a job offer once from someone who wanted him to drive around the m25 running projects on a similar derisory mileage proposal. He saw right through it.

We ended up swapping roles. My job although paying less was in our opinions more secure. So we just managed on a single income and ran a very old car. Fortunately we are both naturally frugal so we often had money left over to save.

Being frugal and budgeting seems to be key. Fuck what anybody else thinks. We have now paid the mortgage off and have good savings. It takes time but with a mathematically sound approach you can do it.

Do not be a slave to a job but if you must then it must make financial sense for it to have a chance of succeeding.

We did have to undergo a lot of misplaced sympathy from friends and neighbours who presumed our life had fallen apart because DH had lost his job and car. Looking back it was one of the best things that happened to us.