Company Car Tax/Child Benefit

A question about : Company Car Tax/Child Benefit

Hello All

Couple of queries.

I am a higher rate tax payer, earning about Ј43,000 a year with BIK car tax meaning I pay 40%.

First Question
My employer wishes to not have company cars anymore, meaning that a payment of Ј750 pcm (before tax) would be made.

This would therefore be Ј9,000 p.a. in taxable income.

The problem I then have is that this puts me over the Ј50,000 child benefit margin, meaning I lose some of that in tax.

I assume that I am correct that this allowance would affect my Child Benefit?

Company Car
I assume this will be a pretty straight 'no' but can my employer give me my current car as a gift in lieu of a bonus. Would this be taxable as income?

Alternatively, can they sell it to me for less than it's worth?

Thanks

Alan

Best answers:

• Is your salary before or after any company pension contributions?
  You are correct - a failrly straight 'No' to your second question.
• I think they could sell it at a fair/written down value though (not "less than it's worth", but at "what it's worth to them") couldn't they?
  Sounds like a fairly standard asset disposal.
  gut feel, take the money, chuck a couple of k into the pension if you can to hit 50k or less, and maybe see if you can agree a fair transaction to buy the car if it's suitable and you like it...?
• Thanks for the quick reply.
  Before, as my employer doesn't currently have a pension scheme, The compulsory start date for this is 01 April 2016.
• [QUOTE=pjread;67678944]I think they could sell it at a fair/written down value though (not "less than it's worth", but at "what it's worth to them") couldn't they?
  QUOTE]
  No - the normal procedure would be to get an independent valuation from a garage and that is what the car is worth. Retain the documentation. The employee is perfectly entitled to purchase at that price and the company/business would show as a disposal in the normal way.
• Thanks everyone - much appreciated.
• Bear in mind that, if your salary is currently Ј43K then the benefit of the company car needs to be added to that, which for some cars may take you over the Ј50K total.
  If the Ј43K includes the current company car benefit, then that would obviously no longer be an issue, meaning that your total taxable income would still be under the Ј50K.
• https://www.theguardian.com/money/201...higher-earners
  https://www.gov.uk/tax-on-your-priva...ion-tax-relief
  https://www.cavendishonline.co.uk/pensions/
• Thanks for the replies everyone.
  No the BIK figure of the car doesn't take me over that amount, hence why it's never been a problem.
  The reason we get such a good car allowance is to compensate for getting it hit at 40%, but this then has another knock on effect.
  I was hoping that the pension route would work that way, so thanks purdyoaten.
  I'll have to get them to increase my bonus to account for the effect on child benefit tho!
  Will have a look at those articles xylophone.
  Still compounds my theory of the squeezed middle!
  Thanks again
  Alan