T.R | Title | User | Personal Name | Date | Lines |
---|
2132.1 | | BAHTAT::DODD | | Tue Aug 10 1993 19:08 | 6 |
| You did tell the nice man at the tax office that your contribution is
made before tax, ie out of gross salary?
It pays to tell them everything.
Andrew
|
2132.2 | | SUBURB::THOMASH | The Devon Dumpling | Tue Aug 10 1993 19:11 | 13 |
| > supplied as a benefit and the individual , out of choice , finances
> the entire cost above the standard figure of a better car , should the
> taxable benefit value of the car should be deemed to be equivalent to
> the standard vehicle and not the true cost price of the car ?
If you financed the extra cost from after-tax money, I would agree,
but you will be funding the difference from before-tax money, so I
would guess not, as this is still a perk.
However, I would be interested to know what happens.
Heather
|
2132.3 | | SUBURB::THOMASH | The Devon Dumpling | Tue Aug 10 1993 19:12 | 5 |
|
Opps collision
|
2132.4 | Ah But ! | TENTO1::LUDLAMA | | Wed Aug 11 1993 13:48 | 7 |
| Hello ,
I didn't mention that this money was pre tax ,but I now of
people outside DEC who provide their own vehicle for company use and claim
tax back against costs , this also applies to a lot of other things
such as telephone ,Laundering of overalls etc,etc. Surely this would
not be any different ?
Regards Arron.
|
2132.5 | | SUBURB::THOMASH | The Devon Dumpling | Wed Aug 11 1993 16:45 | 28 |
| > I didn't mention that this money was pre tax ,but I now of
> people outside DEC who provide their own vehicle for company use and claim
> tax back against costs , this also applies to a lot of other things
> such as telephone ,Laundering of overalls etc,etc. Surely this would
> not be any different ?
It would be different.
I take the money and get a car, I take the money AFTER tax.
Therefore I can claim a percentage of the costs for the car against tax,
(depreciation, insurance, tyres, services etc). The proportion is based
on the amount of company miles to private miles.
So, to do what you want, you should pay for the difference with AFTER
tax money, and claim a percentage of that after tax money back.
If you are on 25% tax, you would need to do more than 25% of your miles
as business to benefit.
If you are on 40% tax, you would need to do more than 40% of your miles
as business to benefit.
I would also asume, if the tax man decided to do this, he would do it
for all people who take a car in the scheme, not just for those who
would benefit.
Heather
|
2132.6 | Beware the new tax rules | FILTON::COLLINS_P | Phil Collins @bso 842 3344 | Fri Aug 13 1993 18:01 | 38 |
2132.7 | The new tax system is fair and right | NEWOA::FIDO_T | Conation is the key | Fri Aug 13 1993 18:13 | 13 |
| Phil,
you've got to be kidding ! Think of all the extra work that would
give the Inland Revenue. They are still going to have to deal with kit
cars, imported cars with no equivalent in this country etc.
Also, it is hardly fair, from a tax point of view, that you should be
charged less tax than me ( an employee of my own company ) for the same
car just because your company can negotiate a better deal by dint of
being bigger. If you and I have the same car as a company car, we
should both pay the same tax, since we both have the same benefit.
Terry
|
2132.8 | Add it up *VERY* carefully | TIMMII::RDAVIES | An expert Amateur | Fri Aug 13 1993 18:41 | 7 |
2132.9 | The company is taking the benefit | TENTO1::BROWNA | The Main Thing, is to keep the Main Thing, the Main Thing! | Fri Aug 13 1993 19:12 | 17 |
2132.10 | Case for privatisation!! | YUPPY::MACMILLANA | | Fri Aug 13 1993 19:32 | 16 |
| It sounds as if this may be the last straw for some people and they
will start to desert the company car scheme in droves. I guess the
Vauxhall deal must be based upon an agreed number of new cars per annum
so eventually there will be a risk that Digital cannot comply with the
contract 8-O (OK that may be in a year or so but it could happen)
In these days of low interest rates and fixed rate loans (for car
purchase); Options 1-2-3; the VW scheme etc... the case for opt out
must be getting stronger.
re 2132.7 - I am amazed that a self-employed person would allow himself
to get caught by a tax liability. Using your own car for business
turns it into a tax benefit if you work at it. (After all, your home
to office mileage is zero etc. etc.)
rgds Alasdair
|
2132.11 | | ESBS01::HIPS::RUTTER | | Fri Aug 13 1993 19:46 | 21 |
| I actually think the I.R. may be doing something right on the
car benefit front (although I would naturally prefer not to pay
for 'benefits' myself - who wouldn't?).
If a car is to cost a private individual a certain amount, then
that is the amount of benefit they are gaining whenever they are
provided with that car by their employer. So, that is what the
tax should be based on - not whatever price a large company may
negotiate that purchase down to.
The fact that list price tends not to reflect normal purchase
price is an issue to be sorted out by the manufacturers. Perhaps
they will do something about this with the new tax equations.
Instead of there being a large 'discount' available to almost
anyone who cares to ask for it, resulting in new cars rarely
costing the list price...
I'd like to be able to buy a new car at a correct price, whether
it is bought privately or as a company car on which I'd pay benefit.
J.R.
|
2132.12 | what if no list price?? | BAHTAT::ALDERTONM | Three feet of Powder at 8 am. | Fri Aug 13 1993 21:05 | 14 |
| re previous few
The IR say the tax will be based on the list price. Ok, what happens if
the manufacturer does not publish a list price??
Ford apparently mooted the idea of not publishing the list price in
an attempt to reduce Fleet users tax liabilities, and hence stimulate
sales. This is a rumour but I wondered if the manufacturer could do
this or whether the publishing of a list price is a legal
requirement???
An interesting thought though! What would the IR base their tax on??
Malcolm
|
2132.13 | | PEKING::SMITHRW | Off-duty Rab C Nesbit stunt double | Thu Aug 19 1993 16:52 | 11 |
| In that case, the IR would base their assessment on their own valuation
of the vehicle. Which could be a bit higher than the old list price.
So if Ford (say) mess them around by not publishing a price list,
they'll mess Ford around by grossly overvaluing their cars for tax
purposes, thus driving fleet buyers away in droves...
Or they could do a major tax audit of Ford every year, in order to have
up-to-date info on which to base their assessment.
Richard
|
2132.14 | I guess it's just tough! | FILTON::COLLINS_P | Phil Collins @bso 842 3344 | Mon Aug 23 1993 23:12 | 23 |
2132.15 | New scheme is cruel but fair | NEWOA::FIDO_T | Conation is the key | Tue Aug 24 1993 12:50 | 32 |
2132.16 | | WIZZER::PARRY | Trevor Parry | Tue Aug 24 1993 12:56 | 10 |
2132.17 | Even more than that! | TIMMII::TOMMII::RDAVIES | Amateur Expert | Tue Aug 24 1993 13:04 | 22 |
2132.18 | Re.16. Get real Trevor! | CMOTEC::POWELL | Nostalgia isn't what it used to be, is it? | Wed Aug 25 1993 16:38 | 12 |
| >>> Is this really true or are you exaggerating to make a point ? The
>>> Digital cars still come from PHH who still buy them from dealers, who
>>> at most are going to give 10% discount. 10% of 16000 is 1600 which is
>>> half as much. ^^^^^^^^^^^^
>>> tp
Typical discounts for PHH and Hertz from Car Dealers range up to 22% in
my own experience. One car I had came from Toyota Maidenhead instead of the
Renault dealer because the Renault dealer would "only" give a 20% discount to PHH.
Malcolm.
|
2132.19 | | WIZZER::PARRY | Trevor Parry | Wed Aug 25 1993 16:52 | 8 |
2132.20 | | COMICS::MCSKEANE | Circus Games | Wed Aug 25 1993 17:15 | 16 |
|
When my last car came up for renewal, I toyed with the idea of opting
out. I phoned up the Toyota garage in Reading (that used to be on the
DECpark roundabout) to enquire about prices.
The guy at the garage asked whether it would be a private or a company
purchase. I said I hadn't made up my mind yet and it would depend on
the differing costs. He then asked which leasing companies did I have
in mind. When I replied PHH or Hertz, he said oh you work for Digital
then. He then went onto say that if I purchased privately then they
would be willing to offer the same discounts as offered to the leasing
companies. They were in the order of 17% for a family type car and 9%
for the sportier cars (I was interested in the MR2)
POL.
|
2132.21 | Car tax calculator | REOSV0::ROEM | | Fri Jan 28 1994 18:40 | 23 |
| Not sure if there's a more appropriate note....
Got this info from a Vauxhall Fleet dealer:
TAX PAYABLE PER MONTH FOR EVERY 1,000 POUNDS OF COMPANY CAR PRICE
Age of Company Car at end of tax year
1994/95 and beyond Less than 4 years 4 years or more
----------------- ---------------
25% 40% 25% 40%
taxpayer taxpayer
Business Mileage
Less than 2,500 7.29 11.67 4.86 7.78
2,500 to 17,999 4.86 7.78 3.24 5.19
18,000 or more 2.43 3.89 1.62 2.59
"The above information must only be used as a guide to enable users to
quickly calculate the amount of tax payable on their Company Car."
(copyright Touche Ross & Co)
|
2132.22 | a theory | COMICS::WEGG | Some hard boiled eggs and some nuts. | Fri Apr 28 1995 17:44 | 16 |
2132.23 | | COMICS::PARRY | Trevor Parry | Fri Apr 28 1995 17:51 | 9 |
| I think you've missed something.
Car Fleet (or whoever) get 3400 to run the car.
If you got that paid you'd get 3400 -25% tax
If you then had to pay car fleet the 3400 they need, you'd be paying
3400 (-25%) tax plus the extra to compensate for the missing amount.
:-)
tmp
|
2132.24 | where's my 1151 ? | MARVIN::ILETT | | Fri Apr 28 1995 19:01 | 40 |
| I never look at the figures the way you seem to be,
I need to know what the car costs *me*. Lease cost and tax
value are not really related.
Let S be salary
Let A be allowance given by digital for a car (if any)
Let L be lease price of your chosen car
Let T be taxable benefit of car
Case 1: take the cash, no car.
Taxable income = (S + A)
You are left with (S + A) - [Tax due on (S + A)]
Case 2: take a car for a lease price, L.
Taxable income = (S + A - L + T)
You are left with (S + A - L) - [Tax due on (S + A - L + T)]
For your case
S = S
A = A
L = 3400
T = 4551
So, case 1: Left with S + A - [Tax due on (S + A)]
case 2: Left with S + A - 3400 - [Tax due on (S + A - 3400 + 4551)]
If we drop in a salary of 20000 and a car allowance of 3200
we get
case 1: 23200 - tax on (23200) but no car
case 2: 19800 - tax on (24351) with a car
Work it all out with the correct tax levels and rates and
you'll see what the lease car costs.
Phil.
|
2132.25 | | COMICS::WEGG | Some hard boiled eggs and some nuts. | Fri Apr 28 1995 19:42 | 12 |
2132.26 | more algebra | MARVIN::ILETT | | Fri Apr 28 1995 21:37 | 41 |
2132.27 | VAT and VAT changes | MILE::JENKINS | | Fri Apr 28 1995 23:10 | 41 |
|
You could easily get a contract hire deal as good as the current
non-vauxhall deals including all the extras mentioned in the last note.
Unfortunately, as a private individual you'd have to pay the VAT @17.5%
on top of any advertised figures.
DEC doesn't (or at least didn't used to) charge us the VAT since it
claimed it back from the VATman. However.....
On August 1, the VAT rules change on company cars. The new rules are :
1. New cars purchased for business use *ONLY* can recover VAT on purchase
price. Where VAT has been recovered on the purchase price, VAT must
be charged on the eventual sale price when the car is disposed of.
2. Businesses who lease cars will only be able to recover 50% of the
VAT on the lease payments if the car is available for private use
by employees. (note: this is VAT on the lease payments for the
capital value of the cars, they will still be able to claim full
VAT refund on maintenance etc.)
Rule 1, I believe, will apply to companies like PHH and HERTZ who buy
the cars and then lease them on to companies like DEC. They will be
able to claim the VAT back (they can't today) because their use will
be soley business use ie. leasing. Because they will be able to claim
the VAT back this should reduce the cost of the lease.
Rule 2 is going to be bad new for companies like DEC. As just about
all of the cars leased are available for private use, DEC will be
effectively surcharged to the tune of just under half of 17.5% of the
VAT they currently pay. I said 'just under half' because it is expected
that the leasing companies will issue two leases for all new cars. One
that just covers the capital value on which only 50% VAT will be
recoverable and a second that covers all the other costs on which VAT is
fully recoverable.
I wonder what this will mean for us?
Richard.
|
2132.28 | | COMICS::WEGG | Some hard boiled eggs and some nuts. | Mon May 01 1995 02:49 | 14 |
2132.29 | Run your own car, 15.89p/mile? | CHEFS::POWELLM | The x3030 contractor. | Tue Jan 23 1996 15:39 | 11 |
2132.30 | Tax benefit on an older used car ? | CURRNT::CARSON | | Tue May 07 1996 18:51 | 15 |
| Simple question here from a novice to the Tax rules surrounding company
cars.
If appreciate that I incur a taxable benefit of 35% (?) of the value of
the New Car. So, whats the deal if I buy a 4 year old one.
I had in mind a Lotus Esprit, but the even a two year old one would
incur me 35% the cost of a new one which is horrendous. A 4 year old
one, would look just as good and hopefully incur less tax. Any ideas how
much ?
Thanks
Paul.
|
2132.31 | | CBHVAX::CBH | Mr. Creosote | Tue May 07 1996 19:09 | 3 |
| ...you can only get new cars on the scheme, as far as I'm aware...
Chris.
|
2132.32 | The answer ...according to KPMG Tax Advisers.... | FORTY2::WILKINS | | Tue May 07 1996 19:26 | 13 |
| Hi,
I agree that only new cars are available via the scheme, however
if you still need the info...
"The benefit is reduced by one third if the car is over four
years old."
Courtesy of my free"Tax Card" from Computer Weekly *8-)
HTH,
Kevin.
|
2132.33 | | CURRNT::CARSON | | Tue May 07 1996 19:53 | 5 |
| thanks for the info, forgot to mention the question was a generic one, ie
I'm doing this through my company not digital. Contractor scumm bag and
all that.
paul
|
2132.34 | | RIOT01::SUMMERFIELD | Sidewalk social scientist | Tue May 07 1996 20:24 | 30 |
2132.35 | Tax Allowances on Opting-out?? | CHEFS::LEYTON | Richard | Thu Aug 08 1996 19:48 | 14 |
| Has anyone any current experience of persuading the nice taxperson to
agree allowances for the costs of business mileage in a non-Company car
- a la Heather's experience (*.5 etc) two or three years ago?
My calculations show the economics of opting out of the leasemobile
scheme to be marginal, unless it is possible to get something towards
the losses incurred in driving for the company at 8.3p per mile. If
they still operate as Heather described that would make a big
difference in my case where 50+% of mileage is for Digital.
Please share any current thoughts or experiences.
Richard
|
2132.36 | | MUGGER::HESLOP | http://frolic.mco.dec.com/brian | Thu Aug 08 1996 20:25 | 8 |
| By getting a form from the tax office (P85?) you can apportion your
costs for running the car for business use against tax. The 8.3p per
mile comes off the running cost you claim. Your running costs include
petrol, servicing, repairs, road tax and insurance. You can also claim a
capital allowance for the proportion of the depreciation, where the
depreciation is 25% per year.
Brian
|