Company director car allowance

stratts

Well-Known Member
Just wondering if anyone knows what the average value per month a company director would get in the construction industry?

I guess it would depend on the size of the company and responsibilities etc but a rough idea would do if poss. Or maybe a percentage of the annual salary so it goes up as the salary increases,

Cheers

Stratts
 
Not many go for company cars nowadays as the tax you pay is really high, its more common to buy the car yourself and then charge a mileage to teh company.
Only other way is if the car is a pool car in which case no tax is payable
 
Sorry I don't mean an actual company car, but a sum paid as part of a salary package per month/annum instead, which would allow them to either buy a car outright or get a lease hire, etc,

Ta
 
...there are a LOT of variables (company size/profitability/etc), but in the region of £800-900/month for a Director I'd have thought.

A lot of people think a company car is 'free' - it isn't, it is a benefit-in-kind and anyone considering a co car if they haven't had one before needs to be fully aware of their personal tax liability arising out of taking this benefit. Monthly car allowance + mileage is an option, but bear in mind that HMRC approved mileage rates have a differential (downwards!) after the first 10,000 miles in a tax year.

A pool car CAN'T be used as anything other than exactly that, ie a pool car. HMRC have a very specific and strict set of guidelines re what constitutes a pool car, and when it's use would result in it being treated as a co car - with the tax implications that brings.
 
Blimey more than I thought, thanks. The company is a small ish family run business with about 25 employees and a turnover of about 3.5 mil and expanding
 
Based on my experiences somewhere between £400-800/month with the company covering insurance and then either you claiming the £0.45 per mile from company or claiming it on tax return.
 
...there are a LOT of variables (company size/profitability/etc), but in the region of £800-900/month for a Director I'd have thought.

A lot of people think a company car is 'free' - it isn't, it is a benefit-in-kind and anyone considering a co car if they haven't had one before needs to be fully aware of their personal tax liability arising out of taking this benefit. Monthly car allowance + mileage is an option, but bear in mind that HMRC approved mileage rates have a differential (downwards!) after the first 10,000 miles in a tax year.

A pool car CAN'T be used as anything other than exactly that, ie a pool car. HMRC have a very specific and strict set of guidelines re what constitutes a pool car, and when it's use would result in it being treated as a co car - with the tax implications that brings.
just out of interest Merlin is a company van the same ? A former colleague of mine used to take a van home and use if to commute when they were supposed to be left at site so in that instance would there be a personal tax liability for that ?
Atb Jim
 
I've not looked at vehicles from the perspective of an employee as I'm classed as self-employed, but wouldn't a high-end, comfortable, double cab pickup, (VW Amarok or similar), be worthwhile investigating as a company vehicle as it's classified as a van for tax purposes, plus the purchasing company can claim back the VAT?
 
just out of interest Merlin is a company van the same ? A former colleague of mine used to take a van home and use if to commute when they were supposed to be left at site so in that instance would there be a personal tax liability for that ?
Atb Jim


Its classed as a commercial vehicle which is why there is a lot more of the pickups on the road
 
I've not looked at vehicles from the perspective of an employee as I'm classed as self-employed, but wouldn't a high-end, comfortable, double cab pickup, (VW Amarok or similar), be worthwhile investigating as a company vehicle as it's classified as a van for tax purposes, plus the purchasing company can claim back the VAT?

That's why I just got me a new hilux instead of a car :)
 
As fairly low down the management pecking order within a similar industry I get approx £450 per month car allowance, my gaffer gets £550 so I'd imagine director level you'd be looking at £700 - £800 per month. I think lot of people get confused between car allowance and company cars, the beauty of the car allowance is that you aren't being hammered with taxable benefits and you don't have to spend it all, or, when the car is paid for, the allowance is your own to do what you want with whilst you are still running the paid for car and when you sell it, the proceeds are your own. But do bear in mind it'll be taxed before it lands in your pay packet so £700 can easily be around £400 in reality).

The other benefit of having a car allowance over a company car is that if your company pays you a milage rate that is less than the HMRC guideline rates (45p first 10,000 miles & 25p for any mileage after that), you can claim the tax relief back at the end of the tax year, they don't advertise that but it can easily equate to a nice lump sum every year.
 
£5-£8k per year is standard
up into the £9-£10k figures and it becomes counter productive due to tax

i place directors in a variety of industries and the car allowance is fairly standard, many of them outsourcing the flexible benefit management to a 3rd party firm who have relationships with all the major lease firms
 
Not sure about that bewsher. Is car allowance not a benefit added to gross package like value of medical etc for HMRC/tax purposes. The amount of car allowance doesnt come counter productive in my opinion - it is taxed the same as a bonus that one may or may not get. I.e. If someone earns say £75k with a £10k car allowance They pay higher rate tax on an element of their gross £85k. I am not an accountant but i dont think hmrc differentiate where they put the car allowance or bonus payment its just total gross earnings.

i.e. If a company pays me £100k gross no-one gives a monkeys if its £50k salary and £50k car allowance or all salary (excluding pension stuf).
 
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