Child Benefit - company car included as income?

[MaggieFS]

When DS was born, as my income for that year was between £50k - £60k, I decided to take the child benefit, knowing I would have to do a self assessment and pay the higher income charge. I decided it was worth doing as I would still get to keep some of the benefit.

Now I'm doing my first ever tax return and the HMRC calculator says I have to pay back the whole lot,I can only assume this is because my company car and medical insurance count towards income and push it over £60k?

I'm so cross, this an absolute arse or paperwork for nothing and I'm sure of I'd seen this when signing up for it, I would have elected not to receive it.

Before I sit on hold on the phone to HMRC, has anyone had the same experience and can confirm this is the case?

Yes, the company car and PMI is what is called 'Benefit in Kind'
There is a calculation based on the value of the car, Co2 emissions, petrol or diesel. A percentage of the value of the car is then taken and this is classed as the 'income'.

You should have received a P11D form from your employer and this would show the 'value' of these benefits.

If it is a diesel or high co2 then you will probably have added a lot of income to the current tax year.

The £50-60k means 'adjusted net income' so while things like pension contributions make your income for CB purposes go down, benefits like a company car or medical insurance make it go up as these are taxable benefits listed on your P11D.

www.gov.uk/child-benefit-tax-calculator/main

Thanks, very aware they're a BIK, just have zero recollection of reading anywhere, before I signed up for the CHB, that they are included within the £50 - £60k income threshold.

And what makes me more pissed off (sorry on a rant now) is that the car is a diesel with a stupidly high charge which I don't even want, but have no choice but to have. It costs me so much in tax. I would be much happier with a cheaper petrol but that's not possible from my employer. Or just to not have the car as I could get my own for less than the tax I pay each year on it. And now this.

Surely it would have been simpler to check beforehand than after the fact, as you're now finding. That aside, I can't think of any logical/common sense reason why it wouldn't be considered income - unless explicitly stated that it wasn't.

But if you know they're a BIK, surely you know they're counted as part of your income

@rottiemum88 I thought I had checked everything

I've never had to do a tax return before, and believe it or not, I don't consider them as income (obviously I will now!). They've always been benefits on which I get taxed via PAYE.

Lesson learned.

Maybe you should ask your employer to change their car policy. Diesels are falling out of favour now, so they shouldn't be forcing their employees to use them, especially if you do much town/suburban driving.

I thought quite carefully when I picked my last company car about whether to have a petrol or a diesel. I think you have to do a much higher mileage than average for diesel to actually be cheaper - I'm probably in the ballpark at around 15000 miles per year, about half and half personal and business.

I decided on a petrol one because it was cheaper to lease (we have to pay a proportion of the lease cost ourselves, based on the expected private mileage) the tax was less and I could claim more for my business mileage for a petrol car (we get the standard fuel only HMRC rates) so all this offset the slightly worse fuel economy, and there's the environmental aspect. We can't really get hybrid or electric cars as the list price is above the price limit that we're allowed - obviously this is something that my employer needs to look at.

But I wouldn't get in a tizz about having to do a tax return. They're very simple and I don't know why people make such a fuss.

Even though I have to pay towards the lease myself, I consider having a company car quite good value.

It's under £200 pm for everything except private use fuel, and I never have to think about the cost of insurance, servicing, MOT, repairs or breakdown cover. The only way you'd be able to run a car significantly cheaper is to get a much older one and hope that nothing expensive ever goes wrong and that it doesn't let you down when setting off to an important work meeting etc.

But it’s not £200 per month due to the P11d value. It’s 20 or 40 % more, plus the possible loss of CB

The stupidity of my company car policy is a whole other subject. I did meet with HR prior to being given my current vehicle and even showed them the sums of the exact model I have in petrol vs the diesel I've got. I'm still cross and disappointed they were too shortsighted with regards to diesel.