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.

Not sure if anyone else has mentioned it (Not RTFT just yet), but could he persuade his employer to turn the car in to a "pool" car?

He wouldn't be allowed to bring it home at night and it would have to be available for any staff to use but it wouldn't then be taxable on him?

Oh and if it was a pool car it wouldn't have any personal use allowed, so all fuel that is put in the car is a cost to the company and would be able to be reclaimed in full.

Sorry OP - I've just seen now that someone else asked the question already

In terms of the mileage reclaimed, I've just done a calculation and can see how you can end up out of pocket.

Using an example of 1,000 mile, a fuel cost of 124.94p per litre and economy of 40mpg means your fuel would cost £142 but you'd be reclaiming £110, so you're £32 worse off.

Take a look at this - HMRC rates. These are the approved rates issued by HMRC. It may be that your DH's employer just pays a flat 11p per mile, but note the differences here. If, for example, your DH has a 1.6l petrol car, the actual approved rate is 14p/mile. In the example above this would change the amount reclaimed to £140, so almost identical to the £142 cost.

If the employer won't change the amount they pay, you can claim for tax relief on the additional amount not paid by them. You can do this here - www.gov.uk/tax-relief-for-employees. A word of warning though - your DH may have to sign up for self assessment and it would likely be paid in arrears the first year. They'd then attempt to put it through your tax code (but they'll probably get it wrong)

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An £80 fuel refund at 11p/mile is only 727 miles? So about 170 miles a week?

In order to know whether the tax element and miles element is right you really need to know car fuel and engine size, what it cost new + the cost of any accessories eg metallic paint / towbar / stereo etc + any contribution you husband makes. This could be a PUC (personal use charge) or a capital contribution...they are similar and difference between them is difficult to understand but they do different things to the taxable benefit. His employer will have provided these either to him or to the tax office so you’re not being cheeky in asking. I don’t want to worry you but my mileage payment has never covered the actual cost of fuel .. your husband needs to keep detailed records of very mile ie if there’s a detour he needs to claim for that too.

I haven't RTFT, only OPs posts, but you look to be miles off in terms of calculations for both take home pay and mileage claimed.

I have had a company car for about 10 years and whilst it does cost me money, it doesn't cost as much as you think yours will.

NotAGeek once you have the value of the car, would you then expect the value to be taxed at 20% as a “Benefit In Kind”? Or is that system no longer used?

It costs my DH around £500 a month in tax for his company car. Could easily buy and run a car for that. It’s really annoying as it’s a tool for work IMO. Like your OH he has a car as he needs one. A bit like taxing a desk!

Sorry I forgot a step! There’s all the CO2/emissions bands as well isn’t there?

So a P11D value first? Then a multiplier based on emissions to reach the BIK value? THEN multiply by your tax rate?

To those saying the employer should have done this sooner - I thought most employers only reported benefits on kind through P11d's after the tax year ends? I could be wrong but sounds like they are dealing with this as expected. Your husband should be able to register for self assessment and reclaim additional expenses there for any mileage not covered. Make sure he is keeping a record of all mileage and receipts and remember to take off personal journeys such as work to home and vice versa. As pp's have said, I think you have miscalculated how much impact this will have monthly which is hopefully good news for you both.

Hopefully, because the fuel-cost impact isn’t that much, he’ll be able to claim tax relief without self assessing. A PP above provided a link which you can following and submit online without self assessment (claim must be under £2500)

So I will have to check with him whether he can change cars but as far as I can tell the company provides every employee in this job role with the exact same car and you don't get a choice.

There was no information sheets etc when he started on costs of the car or tax changes entailed.

I can only go on what I see coming back into our accounts. His work diary calculates how many miles he travels from the office to his appointments and between them and the back to office and his mileage claims are based on that so I don't think he can be under claiming but I'm not sure.

We get 60p/mile if you use you own car when you are not entitled to a company car or car allowance as cash.

Once you have a company car OR you take the car allowance as cash, you get 11p a mile.

Pretty standard. 11p mile covers petrol costs. Your fuel cost is probably something like 6-8p a mile.

“His work diary calculates how many miles he travels from the office to his appointments and between them and the back to office”

I think that’s where your fuel issue is, he wants to check that out because doing over 100 Miles a day and only being refunded for 600 odd a month doesn’t add up.

I've got a company car and pay approximately £80 per month trough tax.

My diesel claim back rate is also 11p per mile and this pretty much covers my diesel costs (work based). I do get through around £300 diesel a month, but some of that is private. I am based from home, so any journey I make for work I claim all miles travelled.

Your husbands mileage claims seem very low, in our company you need to be doing over 1000 miles a month consistently to be eligible for a car, your husband seems to only be doing 600-700 miles a month.

You say that the diary automatically calculates his mileage, does he have a long commute to work? This could be affecting his claim. If you live for example 50 miles from his office base, and he travels 200 miles one day, the calculation would take off the first 100 miles, so the claim would only be for 100 miles, not 200, this could be where the issue is. He needs to look at this and renegotiate his claims based on this.

This may or may not help but for an average car l, for fuel, mot,tax, insurance and service it's about 2500-3500 to run depending on how much you use it, type of car and your insurance.

Obviously if he is doing 100+ miles it would be about 4000 -4500 but that doesn't including replacing tyres or other bits that break.

Why does he have to do mileage based on calendar, why can he not use Google maps? And if he goes from and back to office is he claiming for both journeys?

Might be worth getting him to reset the mileage clock on his journey and write down what he does, or just write down the mileage counter each time to make sure he is claiming enough

Your fuel cost is probably something like 6-8p a mile.

What planet are you on? That majority of cars in the real world will struggle to beat 13/14p per mile, maybe a slight improvement if you do a lot of motorway miles at 55mph.

Do the figures look better if he returns the car, and runs his own on a 45p per mile reimbursement rate ? Seems nuts that you do no personal mileage on it.

Plus, I think tax rules are that if you travel from home to a different place of work, you can claim for the whole trip as it isn't your commute. If he drives past the office it wouldn't count. So own car miles reimbursement could work out if this rule holds if he travels a lot.

I would try to persuade the company to allow him to use his own car (though I realise you then wouldn't be able to use it while he is at work).
If he loves his job that is worth a lot.

www.gov.uk/government/publications/advisory-fuel-rates/advisory-fuel-rates-from-1-march-2016 gives hmrc mileage rates - if his company rate is 11p I suspect his vehicle is 1400cc or less - if not then he can claim as tax allowance the difference between the advisory rate and the rate paid by the firm - if this applies it is well worth claiming at the mileage you are suggesting.

(current petrol prices ca £1.30 per litre meaning he needs to get 12 miles per litre/46mpg to break even - not unreasonable at 1400cc for long drives rather than sitting in London traffic)

current petrol prices ca £1.30 per litre meaning he needs to get 12 miles per litre/46mpg to break even - not unreasonable at 1400cc for long drives rather than sitting in London traffic)

11p per mile would need an average of 54mpg with fuel at £1.30/litre. Not 46mpg.

5000 BIK sounds like a lot. That's the value of the car muliplied by a factor for the fuel efficiency/CO2 number. Is the car 'flash', expensive or quite inefficient on fuel?

That doesn't add up with the petrol reimbursement, which is for a 1400 CC engine or less. My BIK is about half that value for a medium sized estate car.

Is there no way you could fit the car seats in the company car so you only need one? You DH can't be the first person to need such a car.

Does he have to take the car? Does he pay towards the car for his private use? I pay about £170 for my share of the lease cost and about £30 tax on my company car, but this covers everything except private fuel, for a new medium sized estate car, which seems OK.

11p per mile is a diesel HMRC rate. New diesel engines (almost all company cars will be less than 4 years old) will do in excess of 50mpg so no need to be out of pocket on fuel. When fuel prices get too high HMRC adjusts the rates. It does of course depend on how you drive. I get 70-80mpg depending on the weather. But I don't drive everywhere at 90.