Shes gone :(

[dippy_x]

Company car tax is screwing everyone over. A company car is certainly not the perk it used to be!  I’m coming up for 6 years on my GTD, and the amount it cost at the start vs now is astonishing.  It’s an easy one for the gov to keep increasing every year plus the tax changes in Scotland haven’t helped...

[fredgroves]

HMRC decided that the tax benefits of company car benefit was unfair so have been working to eliminate it. The double jump recently was to close that gap.

It only makes sense now if you have a ZEV - they had to leave that to encourage the die hards to make the jump, but that will close out too soon you watch...

I ditched my company car 2 years ago and am far better off financially now.

[Jim_mk7.5]

HMRC decided that the tax benefits of company car benefit was unfair so have been working to eliminate it. The double jump recently was to close that gap.

It only makes sense now if you have a ZEV - they had to leave that to encourage the die hards to make the jump, but that will close out too soon you watch...

I ditched my company car 2 years ago and am far better off financially now.

The crazy thing is, the jump from 20% to 40% is obviously a massive difference so if you just tip over you get screwed.

So for example, if you earn say £40k the monthly tax on a GTI P would be £182 - not too bad.

On £50k the same car costs you £349 a month - £2k extra a year.

I know it has to work this way but you don't get any extra benefit from the car at the different rates. 

[fredgroves]

I could be wrong, but I seem to remember your BIK figure gets added to your other income to decide on your income tax rate.... so you don't just need to be earning under 40k and then have a car... you need to be earning under 40k MINUS BIK or you will tip into 40% for your BIK, with a massive double whammy.

The 40% band itself is a joke really - it used to be the preserve of the truly rich, these days its hardly that. I know its more than a minimum wage salary rate but its still hardly driving around in a ferrari territory.

[Jim_mk7.5]

I could be wrong, but I seem to remember your BIK figure gets added to your other income to decide on your income tax rate.... so you don't just need to be earning under 40k and then have a car... you need to be earning under 40k MINUS BIK or you will tip into 40% for your BIK, with a massive double whammy.

The 40% band itself is a joke really - it used to be the preserve of the truly rich, these days its hardly that. I know its more than a minimum wage salary rate but its still hardly driving around in a ferrari territory.

Yes, I think it does work like that. My calcs were straight from Comcar.co.uk which I should be pretty accurate.

[dippy_x]

Thankfully it’s not a straight up doubling of the rate once you hit the 40% tax band. Eg, if you’re on £45K and your car has a bik of £8K your total taxable salary would be £53k, which means for your car you would be paying tax on the £8K at £5K standard/20% and £3K/40%.

Though the higher tax bracket in Scotland is way behind at £43K instead of £50k and we have the pleasure of 21%/41% tax rates