Joining the electric car club

[Wack61]

Yes, this tax payer is paying 1% first year then 2% following years directly to the government, if I had declined the company car that's 2% the government wouldn't be receiving

Or if you'd chosen the equivalent petrol car they'd be receiving considerably more

Don't get me wrong, in your position I'd do exactly the same but there is a cost to the treasury

 

[Oneball]

Yes, this tax payer is paying 1% first year then 2% following years directly to the government, if I had declined the company car that's 2% the government wouldn't be receiving

Surely you would have paid more if you hadn’t had an electric company car? Either greater BIK on an ICE or tax on income for extra pay.

 

[gb-gta]

Surely you would have paid more if you hadn’t had an electric company car? Either greater BIK on an ICE or tax on income for extra pay.

Exactly.
I guess you can’t blame people for grabbing the massive tax handout, but it’s very wrong in my opinion.

Plus lots of people who don’t even need a ‘company car’ are now using the system to get the general tax payer to subsidise their daily driver by using a ‘salary sacrifice’ scheme. Basically saving 40% plus on their monthly lease cost of their generic white German lease fodder by getting an ev through their employer.

This should clearly not be allowed unless the use of the car can be proven to be ‘buisness related’ only. Which none of it will be.

 

[Jamin]

Exactly.
I guess you can’t blame people for grabbing the massive tax handout, but it’s very wrong in my opinion.

Plus lots of people who don’t even need a ‘company car’ are now using the system to get the general tax payer to subsidise their daily driver by using a ‘salary sacrifice’ scheme. Basically saving 40% plus on their monthly lease cost of their generic white German lease fodder by getting an ev through their employer.

This should clearly not be allowed unless the use of the car can be proven to be ‘buisness related’ only. Which none of it will be.

I’m not entirely convinced I’m grabbing a massive tax handout, it doesn’t feel like it, I am paying 2% BIK to the treasury, the treasury isn’t paying me.
But perhaps you are right and now I feel bad about my life choices, if I hadn’t taken the Tesla I would be running my own private dirty diesel and my cash alternative would go towards the cost of my fuel at £1.70 per litre with 53p on duty and 28p on vat. so not only am I robbing the treasury of the well-deserved additional PAYE and national insurance on the cash alternative, I’m stealing the tax from the lovely diesel too.
It’s a good job I also run a treasury friendly V8 then and part with over £600 road fund license for the pleasure.

 

[philw696]

 

[DLax69]

I’m not entirely convinced I’m grabbing a massive tax handout, it doesn’t feel like it, I am paying 2% BIK to the treasury, the treasury isn’t paying me.
But perhaps you are right and now I feel bad about my life choices, if I hadn’t taken the Tesla I would be running my own private dirty diesel and my cash alternative would go towards the cost of my fuel at £1.70 per litre with 53p on duty and 28p on vat. so not only am I robbing the treasury of the well-deserved additional PAYE and national insurance on the cash alternative, I’m stealing the tax from the lovely diesel too.
It’s a good job I also run a treasury friendly V8 then and part with over £600 road fund license for the pleasure.

Rather a deserving individual get a tax break than a hollow thing like Tesla.

 

[safrane]

The sad thing about the tax breaks is that the choice of cars are mostly from China and the US...so our balance of trade falls even further... same with that silly scrappage scheme with made Hyundai and Kia millions.

 

[Jamin]

View attachment 110436

 

[Felonious Crud]

Compared to, IMO the MG looks modern and isn't called funky cat

Quite what Mr John will have to say I have no idea, but I can't imagine he'll be pleased.

 

[Felonious Crud]

View attachment 110436

Is that Andrew Tate?

 

[DLax69]

Quite what Mr John will have to say I have no idea, but I can't imagine he'll be pleased.

"Get back"

 

[Felonious Crud]

"Get back"

To those high-class ladies in New Orleans? On my way!

 

[gb-gta]

I’m not entirely convinced I’m grabbing a massive tax handout, it doesn’t feel like it, I am paying 2% BIK to the treasury, the treasury isn’t paying me.
But perhaps you are right and now I feel bad about my life choices, if I hadn’t taken the Tesla I would be running my own private dirty diesel and my cash alternative would go towards the cost of my fuel at £1.70 per litre with 53p on duty and 28p on vat. so not only am I robbing the treasury of the well-deserved additional PAYE and national insurance on the cash alternative, I’m stealing the tax from the lovely diesel too.
It’s a good job I also run a treasury friendly V8 then and part with over £600 road fund license for the pleasure.

Don’t get me wrong, I don’t blame people for doing it at all ! To be honest I should do it, it makes for a cheap car either to buy or lease as a runabout, if I wanted a new runabout.
It’s the political aspect I don’t like, suggesting there’s a big boom in ev sales because that’s what the people want. Maybe it is, they are good as urban runabouts but what they won’t say is that most of them are only bought because the taxpayer is funding a large part of their cost.

A rough example below, anyone feel free to debunk my numbers.

Mr X earns £60k/year.
Currently leases mid range golf as family runabout for £399/month (deposit included).
Company has salary sacrifice scheme for EV’s.

Annual lease cost of Tesla model 3 £8k/year.
This is offset against tax at 40%, NI at 3.5% .
Tax saved 43.5% of £8k = £3460/year

BIK at 2 % of value of car circa £55k = £1100.
£1100 tax bill at 40% so cost to employee is just £440/year

Therefore tax subsidy on car is £3020 compared to if leased personally out of taxed income.

Effective lease cost is now £4980/year, £415/month, instead of £665/month if you just leased one personally, which at that price you probably wouldn’t do.

Only £15/month more than a mid range golf! Plus no fuel to buy! It’s a no brainier.


Just seems to me in a ‘cost of living crisis’ governments using tax receipts to fund £50k plus EV’s is a tad odd.
But if course it help the people on the scheme with their costs!

 

[Guy]

Don’t get me wrong, I don’t blame people for doing it at all ! To be honest I should do it, it makes for a cheap car either to buy or lease as a runabout, if I wanted a new runabout.
It’s the political aspect I don’t like, suggesting there’s a big boom in ev sales because that’s what the people want. Maybe it is, they are good as urban runabouts but what they won’t say is that most of them are only bought because the taxpayer is funding a large part of their cost.

A rough example below, anyone feel free to debunk my numbers.

Mr X earns £60k/year.
Currently leases mid range golf as family runabout for £399/month (deposit included).
Company has salary sacrifice scheme for EV’s.

Annual lease cost of Tesla model 3 £8k/year.
This is offset against tax at 40%, NI at 3.5% .
Tax saved 43.5% of £8k = £3460/year

BIK at 2 % of value of car circa £55k = £1100.
£1100 tax bill at 40% so cost to employee is just £440/year

Therefore tax subsidy on car is £3020 compared to if leased personally out of taxed income.

Effective lease cost is now £4980/year, £415/month, instead of £665/month if you just leased one personally, which at that price you probably wouldn’t do.

Only £15/month more than a mid range golf! Plus no fuel to buy! It’s a no brainier.


Just seems to me in a ‘cost of living crisis’ governments using tax receipts to fund £50k plus EV’s is a tad odd.
But if course it help the people on the scheme with their costs!

Thanks! Good to see the real financials laid out with clarity. Of course you could have used an ID3 to make exact comparison to the Golf. My wife's employer has just proposed the same scheme for employees but the financial temptation is tempered by the lack of an interesting EV and the the outcome of getting rid of one of our cars to make room! Currently she loves her Cayenne 4.2 V8 diesel rocket ship that does 34mpg on average.

 

[Wack61]

Surely you would have paid more if you hadn’t had an electric company car? Either greater BIK on an ICE or tax on income for extra pay.

I've never been eligible for a company car so don't really understand how it works but looking at the numbers a 40% tax payer will pay £412 on a £51k kia or £7274 on a similarly priced volvo diesel plus I assume the volvo will have higher ved

 

[gb-gta]

I don’t believe people have had company cars in the traditional sense for years now, due to the above. I think people have been given an allowance instead of a car, and just buy a car they want personally with that.

With this slash in BIK on EV’s, which I think came in in 2020 at 0%, now going up to 2%, it’s now more attractive to jump back in again, but only if you want an EV of course. And companies are jumping in with incentives now to their staff, who don’t actually even need a company car, with these salary sacrifice schemes. It’s a tax free perk basically.

 

[mjheathcote]

As I've posted earlier my employer has made a salary sacrifice scheme to all employees through Octopus.
As a business driver I've opted out for the last 5 years and taken the money.
It just doesn't work for me however.
The attractive rates advertised don't look that attractive once adjusted for proper business mileage. 8k miles a year might be okay for a daily commute, no good when you are at least doing double that mileage for business.
Doing more miles for business makes charging at home at low kwh rates less likely. I was at McD this morning and noticed their quick 50kw charger was 75p per kwh.
What you can claim for business mileage assumes you aren't paying 75p per kwh! more like 10p per kwh, that's no good when you are a couple of hundred miles from home and need to charge to get home.
So the scheme isn't aimed as a green alternate to the higher mileage business driver. Crazy really.

 

[Swedish Paul]

Oh, back to the good old days where you got a free car, free petrol and you didn’t have to do any business miles. No tax. Maybe British Leyland would have survived.
I don’t know anything about BIK or how it works nowadays, but it does seem biased.

 

[Wack61]

Oh, back to the good old days where you got a free car, free petrol and you didn’t have to do any business miles. No tax. Maybe British Leyland would have survived.
I don’t know anything about BIK or how it works nowadays, but it does seem biased.

Years ago one of the guys that ran the garage I had my van serviced at claimed business use, I can't remember the numbers but if you did over so many miles you paid a lot less tax

He did over the miles so claimed the lower rate, only they came in and questioned him, worked out he spent so many days in the office, travel to work doesn't count so they knocked that off and he was under

The sent him a bill for the last 7 years, can't remember what it was but it was a lot

 

[SE_123]

Quite interesting Telsa cut their model 3 and Y prices by ~15% today.

As a result there has been an immediate drop in the used prices today, cheapest used model Y basically fell 5k overnight.

Dealers with these used cars in stock would be livid (and private cash owners).