Conference terri::cars_uk

    George,
    
    Its a great shame Heather Thomas is no longer around as she would have
    a lot to say on this. In fact this has been discussed many times in
    this conference (pointers anyone ?).
    
    End of lease is definately the right time to opt out. If you have made
    no claims then a letter can be obtained from car fleet/insurance and
    may be taken as proof to get you a better insurance deal.
    
    I believe it is also a local matter with your manager as to whether
    you can opt back into the scheme or not. The general rule is that
    once out you cannot come back in but there are circumstances where
    this can be allowed.
    
    Hope this helps
    
    Royston

    I think you'll find opting back in is much more of a concern to the
    Inland Revenue than to Digital management.

    re .0
    
    If you are an employee who needs a car for their job I believe you only
    get 8p per mile not 32p.
    
    Andrew

With 15,000 business miles a year to depreciate your private car (as Andrew
says, it's 8p a mile) I wouldn't even waste my time on the figures. You are
better off with a lease car.

Dave.

    Re.2
    
    I'm not sure what IR rule Digital are working to but neither me or my
    accountant are aware of anything which would stop you opting in and out
    of the Co.Car game (Providing that you stay within the Petrol Tax
    allowance (n pence / mile) which Digital do). Perhapse someone could
    point me to the appropriate legalisation.
    
    	Rik-considering-whether-to-opt-back-into-his-car-scheme.

    I can't point you at particular legislation, but the argumrnt revolves
    around the 'need' for the company car.
    
    The IR say that if the job hasn't changed, then the need can't have
    changed and either you did or didn't 'need' the car.  That being the
    case they'll try and take you for back tax on the benefit.

    re .3
    
    I have spoken to car fleet, they tell me I get 2,950pounds p.a.
    (this is taxed) I will also get 32p per mile for the first 100 miles
    each week, up to a maximum of 4,000 miles p.a., then it's back to
    8p per mile.
    I think this is why my previous manager would not let me opt out
    3 years ago.
    
    George.

    .7�    (this is taxed) I will also get 32p per mile for the first 100 miles
    .7�    each week, up to a maximum of 4,000 miles p.a., then it's back to
    .7�    8p per mile.
    
    Are you sure?? I am not doubting your word/typing, just the information
    that you have been supplied.....
    
    Things may have changed over the last 2 years, but this rate of 32p a
    mile used to be only for those non-qualified drivers.... and these
    people did NOT get the 2,950 pounds.
    
    The rules used to be:
    	EITHER you need a car - so you get 2,950 + 8p a mile
    	OR you don't need a car, and then you get 32p a mile (although if
    		you do more than 4,000 miles you obviously DO need a car, 
    		so we will cut back to 8p a mile!).
    
    Cheers, Chris
    
    [btw: John Bull @ UCG is a colleague of the ex-Heather Thomas. John
    also has opted out / never opted in, and so may be able to offer some 
    help]

From VTX:-

    Employees provided with a car by the Company, employees who choose to
    take a car through the Scheme without a Car Supplement, or any employee
    with a supplement who declines to take a car, should claim the 'lower'
    mileage rate for business travel.

    For more information on Digital Car mileage rates, refer to the Expenses
    option on VTX.

    
    FWIW, the main reason for opting out on the current, reduced-offer,
    scheme is that you don't need the comfort of a new motor, nor the
    consequent tax hit ..... & I happen to like large, fat old man's cars.
    
    I'm perfectly happy driving a car more than 1 year old, bought at
    auction. Keep it one year, sell privately. You'll find it does wonders
    for your per-mile costs. I've never understood why people get excited
    about mpg, when depreciation is by far the larger differential/expense 
    (even for 40k business drivers like me).
    
    
    Colin
    
    
    

    Thanks for putting me straight on the 32p per mile, looks like
    I got duff info from car fleet. (I nearly bought a car on the promise
    of 32p per mile !) 
    I must remember the first rule of the field service engineer, 
    "never believe anything, anyone tells you".
    
    The way I see the financial equation with the info I have at the 
    moment.
    
    Income: All figures approx. in pounds
    
    	Digital allowance (taxed 75% of 2,950)  	2213
    	Saving on income tax				 700
    	Saving on payment for current car	         500
    	Tax allowance for car loan			 500
    	 "    "		" service, insurance		 250
    	 "    "		" capital cost of car    	 500
    							----
    	Total						4663
    							----
    
    Expenditure:
    
    	Loan repayment					 3000
    	Insurance					  500
    	Servicing					  700
    	Road Fund 					  130
    							-----
    	Total						 4330
    							-----
    
    Many of the figures are guesstimates, I want to buy a fairly new
    <10,000 miles mid sized estate for 8-9K pounds, and I'll have to
    find 2K for the deposit (Any garages take Opportunity Channel Amex).
    
    I guess I'll make no profit, but I'll have a trade in for the next car,
    or a car to drive home in when I get the package.
    
    
    George.
    
    	

    Are you sure that one can get tax relief against the loan for purchase
    and the capital cost? I thought, and I may well be wrong that one could
    only claim costs like servicing, tyres, and depreciation. This would be
    reduced in proportion for private/business miles.
    
    Andrew

    My lease is up. My miles are about the same as .0 ie 75% business,
    so 75% of the tax-refundable stuff will come back to me.
    
    I have decided there isn't a huge amount in it financially, but out of
    the scheme I am a free agent and can get a better deal than the scheme,
    consequently I am opting out before the scheme or the tax situation
    gets any worse.
    
    Rover 214GSi+ABS+AC on scheme @ 2k9 per year last year. Stay in scheme
    and have v. basic Vauxhall for the same price as last year's Rover. 
    
    Or opt out, and for the same cost to me as the "standard" Vauxhall I
    can end up with a car I chose myself (Peugeot 306XTdt+ABS+AC).
    
    Rover would have been nearly competitive if I'd been able to buy on the
    Rover employee scheme but I'm one of the few people in Brum with no
    relatives in either Rover or British Aerospace, so I pay top price. And
    insurance on Peugeots is cheap.
    
    regards
    john

    Re: .12
    
    I got the info from the local Inland Revenue information office.
    The man I spoke to was not an expert, and they have no pamphlet
    on the subject, but he sent me a claim form which itemised the
    points I mentioned previously.
    
    I don't know if a claim for capital cost and claim for loan are
    mutually exclusive.
    
    Anyone tried this claim ??
    
    George.

    Hi,
    
     I have clawed back some money from the taxman using form P87.
    
     It describes about claiming capital allowance and loan interest
     relief on the back.  It appears you can do both.
    
     My biggest problem has been persuading them to realise that
     the Digital compensation of 8p/mile fairly covers petrol.
     Ideally they like you to keep receipts for *all* petrol
     purchased, then apportion according to business/own usage.
    
     Good luck,
    
     Jeremy.

    The book, Car or Cash, by CCH Editions, referred to elsewhere in here,
    talks about "fixed profit mileage payments" such as Digital's setup. If
    the scheme is seen to be "fixed profit" it says the revenue shouldn't
    care about splitting fuel expenses between private and business travel.
    
    I believe CCH's main business is training seminars for accountants. If
    anyone wants to order the book I'll post details tomorrow.
    
    regards
    john

    Don't forget the NI on the Car allowance. It could be as much as 9%.
    
    This reduces the net amount received to �1947.
    
    Also I would collect _all_ receipts (screenwash, car polish, new road
    atlas, etc. The nodding dog or Garfield is not a tax deductable
    expense). I suspect that if the money you receive is greater than
    your expenditure you may find yourself with a tax bill to pay. 
    
    Dave

    The following book provides detailed information to help you to choose
    whether to stay in or to opt out.
    
    Car or Cash		ISBN 0 86325 330 x
    Written by Coopers+Lybrand and the AA
    Published by CCH Editions Ltd (Tax, Business and Law Publishers)
    Orderable by phone from CCH in Bicester on 0869 253300
    Price �4.99
    
    I have the 1993 edition but I believe nothing much has changed
    
    regards
    john

    Just a thought.....a somewhat unpleasant one perhaps....
    
    Those that opted out of the scheme just before the 'new' scheme came
    into existence last year retain the higher (previous scheme) supplement 
    values. 
    For how long? 
    Surely to be fair to all employees, the allowance should reduce to the
    current supplement 3 years after the anniversary of the introduction of
    the reduced supplement....or is there a legal precident why this can't/
    shouldn't happen.?
    
    Comments anyone?
    
    Tim
    
    

    John,
    
    Thanks for the details of the book "Car or Cash" I've ordered it.
    
    The current edition is 5-99 pounds (some prices seem to rise even
    quicker than the digital mileage rate) .
    
    George.
     
    

   Anyone care to comment on the following snippet which I picked up from 
   someone recently ??
 
   As Digital only pay 8p/mile and everyone - AA and even the IR - recognises 
   that running a 2 litre car costs @25p/mile - I am led to believe that the 
   "difference" of 16p or so, can be offset against tax as legitimate running 
   costs. Makes quite a difference as to whether to opt out....
 
   Rog

    Rog, 
    
    I've just taken delivery of the book "Car or Cash", written by the
    AA/Coopers and Lybrand. 
    
    We have the option to do one of the following;
    
    a)You can treat any payments from Digital as non-taxable, i.e 8p/mile
    and say thanks very much. (This then excludes you from claiming any
    other tax relief on your other motoring costs.
    
    or 
    
    b) Treat the 8p/mile as taxable and then claim tax relief on HP
    payments/ petrol/ insurance/ maintenance and depreciation. 
    
    Option b) depending on the car and its running costs, this can
    potentialy turn your 8p/mile into something like 20p+. 
    
    Regs
    
    Andy
    
     

    I thought the 8p a mile was for company cars and there was a higher
    figure for your own car, aout 25-30. I don't have any documentation on
    this but if you could get hold of an ex-Kienzle/now Digital employee
    he/she may have more info. 
    Kienzle ran a policy of being able to use your own car for business.

	I looked into this .... 

	If you are in the car scheme you get #3560 (for level 8's) to put towards
	a lease car (if you spend less you get the difference in your salary) plus 
	8p/mile for all business miles.

	If you opt out the company gives #3560 (again for level 8/9), but still ONLY
	8p/mile. Digital state that they provide money in lieu of car and that this 
	covers both purchase and running. You ONLY get 32p/mile if you are not getting
	the car supplement (ie. DEC does not give you any money on top of your base
	salary).


Andy.

                <<< TIMMII::DISK$USERS1:[NOTES$LIBRARY]CARS_UK.NOTE;1 >>>
                                  -< Cars UK >-
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Note 2274.24                 Opting out experiences                     24 of 24
SUPER7::HUGHESA "Swimming against the tide @#%*"     15 lines   8-JUL-1994 09:47
                                 -< Still 8p >-
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I looked into this .... 

If you are in the car scheme you get #3560 (for level 8's) to put towards a
lease car (if you spend less you get the difference in your salary) plus 
8p/mile for all business miles.

If you opt out the company gives #3560 (again for level 8/9), but still ONLY
8p/mile. Digital state that they provide money in lieu of car and that this 
covers both purchase and running. You ONLY get 32p/mile if you are not getting
the car supplement (ie. DEC does not give you any money on top of your base
salary).


Andy.
    

    Chaps, 
    
    If you opt out, isn't the supplement taxed as normal income?
    
    In which case the Revenue would then only see the 8p as being towards
    the cost of the milage. Then you might be able to claim the difference.
    
    Peter

	Isn't that what .22 (b) was saying???

	This sounds like a good deal!

	mb

    mb,
    
    I think that .22 was talking about the .8p per mile. I was thinking of
    the �2k-�5k supplement.
    
    But then again, I did say that I knew nothing about it!
    
    peter

The way it used to be, and (I think) in principle still is as I understand it.

An employee is either a `Qualified user', i.e. can have cash or car along with
the job, or is NOT a `Qualified user', i.e. NO cash and if you have a car you 
pay full whack.

If you are NOT a `Qualified user' you get a mileage allowance that includes a 
contribution to depreciation, tax, insurance, wear & tear etc.

If you are a `Qualified user' you get 8p/mile to cover fuel costs only, the 
depreciation, tax, insurance, wear & tear etc elements are provided in your 
cash allowance, or if you have a company car they are not at your expense 
anyway...

One way of looking at the car scheme is to consider that every `Qualified user'
gets a cash allowance to spend on a car, some people choose to use this to pay
for a company car, others `opt out' and buy their own car.

My reasons for opting out are that after 15 years of running a company car, I 
had NO asset, NO no-claims bonus, and if my job evaporated, NO transport.
In addition, the vehicle I want to own is much too expensive for me to afford
a NEW one every three years. The ONLY way I can afford it is to buy an old,
(relatively) cheap one, then upgrade it every few years.

I estimate that having opted out is building my asset at about �100 per month, 
at a cost of `roughing' it in an older car for a few years. I can live with that.

	John Travell.

    re.-1 and .22
    
    Everybody can exercise the options a) or b) within .22. The 32p per
    mile is to compensate NON-Qualified users because they do not have the
    benefit of the car supplement every month.
    
    So, If you are NOT Qualified and do 10,000 business miles per year in
    your own car, then..
    
    1. Get a company car on DIGITAL, or,
    
    2. Start filling in the expenses tax return form from our friends at
    the revenue!
    
    Regs
    
    Andy

    
    
    re -.2
    
    If you opt out I was of the impression the Car you bought instead had
    to be less than 3 years old, so as to give the right impression to our
    customers (what customers?).

I've never heard of this before and know several people
who have opted out who have cars much older than 3 years.

	So, I've got to sell my 18 year old MG BGT?  I think that
	what car is "appropriate" depends on your job.  I'm in
	scruffy engineering...

	Dave

	Many years ago - like about 15 - when I was in Field Service, my own car
became "over 3 years old," I was told in no uncertain (but not unpleasantly)
that my car must be replaced.  I joined the cocar scheme.

				Malcolm.

I can find nothing in PP&P to support the three year old car rule. Unless
someone can provide a reference to policy I'd assume it no longer applies.

Dave.

    
    When I opted out recently, I had to sign that I would run a vehicle "of
    suitable appearance for business use", or somesuch. Not age related.
    
    Colin

    Did they count the number of wheels ?
    
    Just a thought...
    
    Rob

When I opted out last septtember I was never asked to sign anything!.

Obviously different rules!

Richard