Company car or take the allowance ?

OK, I was sat waiting for my speed awareness course earlier and was bored, so did some f.ag packet example calculations. (Edit: why is *** a banned word?)

Don't shoot me if they are wrong but I think this looks about right.

Lets say you are basic rate taxpayer, 20k miles a year and they are offering 450 a month and mileage of 40ppm for 10k then 20ppm after. Your company car has a value of 22k and a BIK rate of 23%.

This would mean you currently have an adjustment to your personal allowance of 23% of 22k which is 5060 So you pay an extra 1012 quid a year for your car in tax.

If they give you 450 a month, taxable, as an allowance, that is 360 net. Or 4320 a year.

Then you get 10k miles at 40p which is 4000
And another 10k miles at 20p which is 2000
Total 6000

But HMRC allows 10k at 45p = 4500
And 10k miles at 25p = 2500
Total 7000

So you have a business expense of 1000 which means you can claim 200 tax back. So you get 6200 in total for the mileage.

Now lets say your car does 45 to the gallon and fuel is 1.40 per litre average (currently less but factor in it going up). Thats 6.35 a gallon.

Your 20k miles = 444 gallons or about £2822 in fuel. So you make a profit of 3378 on the mileage.

So your total income after taking fuel into account is £7698. Your company car costs you £1012. So if you are down by less than £1012 a year you are better off. So if you spend less than £8710 on everything else, or about £725 a month then you are better off taking the money. That £725 covers everything other than fuel so loan for car, insurance, tyres, servicing.

Same numbers if you are a higher rate taxpayer

Tax currently - 2024 a year

Allowance net 3240 a year

Mileage profit 3578

Total income 6818

Amount to spend to be no worse off 8842 or 736 per month.

Suprising that, I thought the numbers would be different for a high rate tax payer but they are virtually the same.