Do you pay income tax for a company car? - Alfa Romeo Forum
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View Poll Results: Do you pay income tax for a company car?
NO, should I? 2 28.57%
NO, I cheat the Tax Revenue Service 2 28.57%
NO, not in the UK 0 0%
NO, not in the USA 0 0%
NO, not in Australia 0 0%
NO, not in Italia 0 0%
NO, not in Germany 0 0%
NO, not in Canada 0 0%
NO, not in (other country), please specify 0 0%
YES, them *******s. Please state country 3 42.86%
Voters: 7. You may not vote on this poll

 
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(Post Link) post #1 of 14 Old 17-10-05 Thread Starter
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Crazed Do you pay income tax for a company car?

Just curious. In Holland we pay tax on having a company car. 22 Percent of the catalog value is added to our income and then taxed. How is this in other countries?


ciao
Joost from Holland (a.k.a.The Netherlands)
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Re: Do you pay income tax for a company car?

I don't have a company car.
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Re: Do you pay income tax for a company car?

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Originally Posted by THROTTLEMAN
I don't have a company car.
Me neither
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Re: Do you pay income tax for a company car?

Company cars aren't as common as they seem to be in Europe -- at least based on my perception of the number of AOers with company cars versus the number of people I know here with company cars.

While I don't have a company car, the answer is yes, if you have a car provided by your company, you'll pay taxes on it. Sorry it's not directly from the tax code but this should give you the general idea.
--Toronto

"Do You Use Your Vehicle for Work?
"Car allowances
"Employees that use their vehicle for employment purposes may qualify for a tax-free car allowance from their employer to cover the cost of travelling expenses. To qualify, the allowance must be reasonable and based upon
the actual kilometres driven for employment purposes. Alternatively, the employer may pay the employee a fixed monthly allowance for the business use of the car. However, this amount must be included in the employee’s
income.

"If the per kilometre allowance is not sufficient to cover all of the travel costs, the employee is entitled to include the allowance in income and claim a deduction for the vehicle expenses. To determine whether it is to your advantage to record the income and claim the expenses, you will need to maintain accurate records of all expenditures and kilometres driven for work related purposes.

"GST rebates
"If you were an employee and did not receive a tax-free per kilometre traveling reimbursement, you may be entitled to a GST rebate on the vehicle-related expenses claimed. In order to be entitled to the rebate, your
employer must be registered for the GST. The rebate is calculated as 7/107ths of eligible expenses unless you reside in the provinces of Newfoundland, New Brunswick or Nova Scotia. Within these harmonized tax provinces, the rebate is calculated using a 15/115 formula.
If you received a per-kilometre allowance that is not considered reasonable and you deduct additional expenses, you may only claim the rebate if the employer certifies that the allowance is not considered reasonable at the time of reimbursement. If your employer believes that the allowance is reasonable, you cannot claim the rebate. In this case, the employer will be entitled toclaim a refund of the GST component of the allowance paid.

"Standby charges
"When employers provide a company car, employees are sometimes surprised to see a taxable benefit on their T4 for their personal use of the car. In these instances, the taxable benefit is calculated at 2% of the cost of the vehicle multiplied by the number of months the vehicle was available for the employee’s use. This benefit can be reduced where the vehicle is used more than 90% for business purposes and the average monthly driving
in the year is less than 1,000 kilometres per month. Thus, if the company vehicle cost $20,000 and was available for use for the entire year, the taxable benefit to the employee would be deemed to be $4,800. It is worth noting that this standby charge applies regardless of how long the vehicle has been owned by the employer. For example, a 1995 vehicle that may be fully depreciated would still confer a taxable benefit of $4,800!

"If the company provides a leased vehicle, the taxable benefit is 2/3 of lease cost (including taxes) times the number of months available. In addition to these standby charges, the taxpayer is required to add an operating cost benefit to personal income calculated at 15 cents (16 cents in 2001) per kilometre driven for personal purposes."
http://www.brwc.com/taxation9b.htm
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Re: Do you pay income tax for a company car?

In South Africa, you pay Income tax on 50 % (i think) of your car allowance.
To be honest, I do not mind, Government supposedly use the money to make my life better. Admittedly, in South Africa, government departments are still underfunded and services could be better, but in a few years time we should have proper public services. Tax benefits everyone in the long run, so I pay up what I need to.
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Re: Do you pay income tax for a company car?

I cheat!!!, well not really I get an allowance based upon an assumed Mileage. I prefer it that way I get to choose my own Cars, change them when I want, claim for business miles on my other Cars if I want to and I don't pay the tax man anything for the priviledge.
Our MD is very reasonable about it and we don't actually do anything illegal ......honest!
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Re: Do you pay income tax for a company car?

Quote:
Originally Posted by VeloceMitch
I cheat!!!, well not really I get an allowance based upon an assumed Mileage. I prefer it that way I get to choose my own Cars, change them when I want, claim for business miles on my other Cars if I want to and I don't pay the tax man anything for the priviledge.
Our MD is very reasonable about it and we don't actually do anything illegal ......honest!
Until you get an inspection by a deligent inspector, if you don't maintain
proper mileage records giving details of trips and check the mileage claimed for that trip is reasonable. Have seen it done once or twice and once the tax man gets a bee in his bonnet about a particular company they will go for any easy route to claw back money.
Not scare mongering but if you cannot back up your mileage claim without statisfactary evidence you could be liabile to a hefty tax bill for non disclosed income.

No company car for me either don't do enough miles to justify the tax liabilty.
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Re: Do you pay income tax for a company car?

Yes,in the UK.

Its very complicated but its worked out by a formula,dependant on your car`s CO2 emissions banding,its list price,and then taxed at 22 or 40% of the resultant figure depending on your tax band,which is then taken away from your tax free allowance.

Whatever ,it still works out cheaper for me than buying,financing and servicing my own car and you know exactly how much every month its going to cost you.

If you want to work it out try this: http://www.comcar.co.uk/dir1in.cfm
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Not Happy Re: Do you pay income tax for a company car?

Quote:
Originally Posted by Joost
Just curious. In Holland we pay tax on having a company car. 22 Percent of the catalog value is added to our income and then taxed. How is this in other countries?


ciao
Joost from Holland (a.k.a.The Netherlands)
Hi Joost, from Holland, like you... Them b*stards
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Re: Do you pay income tax for a company car?

*******s indeed. Over here we get a tax free mileage of 500 km (or 306 miles) to drive not business related. If you exceed this by as much as 1 mile, you'll have to pay (mostly) 42% tax over 22% of the catalog value of your car.

To prove that you are not exceeding the 306 miles limit, you'll have to maintain an administration of your driven miles (business and private), including day, number of drives per day, kilometers per drive, zipcode to zipcode and so on.

A private car used for business can be compensated (at the employers discretion) taxfree at 18 eurocent per km or 13 dollarcent per mile. Including depreciation and maintenance, this is a joke. But, our beloved government stated to raise it to 19 eurocent because of the high fuell prices (for which the government is responsible, since 62% of our fuel price is tax related). *******s.

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Re: Do you pay income tax for a company car?

In denmark you´re supposed to pay for a company car -
But since I haven´t one specific and have the Alfa registred in my name, I run free
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Re: Do you pay income tax for a company car?

No........I don't pay any income tax
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Thumbs Up Re: Do you pay income tax for a company car?

I opted out of paying car tax.
Got shot of my Vauxhall/Opel Co car and purchased myself a ,Bella Bruto, 147 GTA.
I now pay a loan company for a car I want; Instead of paying Mr.Taxman, virtually the same amount, for a crap car with no Marque, Character or sweet sounding V6 Engine.
If I use the GTA for work I get reimbursed for the miles.
But I don't get: servicing, petrol, tyres, road tax or Insurance paid by the Company anymore.
IMHO that's an easy sacrifice to make, when you end up with a GTA.
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Re: Do you pay income tax for a company car?

Quote:
Originally Posted by Foxie
IMHO that's an easy sacrifice to make, when you end up with a GTA.
Still, didn't you just wish your employer paid for her too (would be a perfect world)?
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