Quote:
Originally Posted by m1bjr
Wow,
a concise answer and very quickly.
Thanks for taking so much time mate.
I am doing 25k per year. I rarely use it for private as I have other toys.
Opting out looks nonsense doesn't it?
The idea was to go used/cheap and bank some cash this time, knowing I can change my mind.
I thought upper tax limit was over £42k though, your numbers dont allow for the tax allowance?
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So taking those figures you have the followwing to fund the car:
£550 pcm * .6 = £330 per month
Assuming 25k business miles then:
10,000 * (0.45 - 0.17) = £2,800 tax relief
@ 40% = £1,120 or @ 25% = £700
15,000 * (0.25 - 0.17) = £1,200 tax relief
@ 40% = £480 or @ 25% = £300
Total tax relief @40% = £1,600 = £134 per month
Total tax relief @25% = £1,000 = £84 per month
So you end up with £464 per month to fund the car, tax, maintain, insure and tyres etc or £384 if only able to claim tax relief at 25%
However as someone else says you have to add to this what you would have been taxed as BIK on the company car.
So on a basic 316d ES BIK is 17%, so the tax burden on at 40% tax payer would be £1714 and on a 25% payer £1071. Thereby adding £143 and £89 respectively to the monthly budget.
So 40% tax payer has £607 monthly to play with and
25% tax payer has £473
Next we need to consider whether the OP would be making an "profit" on his 17p per mile from the company, which we have so far assumed is consumed by his fuel costs.......
If he gets a car capable of 50mpg then he'll be paying about 13p per mile for diesel at today's prices, so he's be maing 4p per mile x 25k miles = £1000 or around £83 per month. Obviously this will reduce as fuel costs rise or if he gets a less economical car.
so now
the 40% tax payer has £690 monthly to play with and
25% tax payer has £556