New Car Dirty Engine ?

[CharlieFarlie]

Some of you may know that since moving back south I am back running the building business I sold up four years ago...

This was on a self employed basis but the revenue wont allow this to go on for long as it infringes the employment rules of today IE a person cannot continue in self employment for the same contractor indefinitely..

So I have been offered a role on the books with holiday pay and everything ! I have never had holiday pay since leaving school !

Part of the package is a company car.. So looking through the list of cars like Mondeos and Vectras and all that crap I phoned the accountant and asked if I could have a new shape Rav4.. Well if you don't ask and all that..

I was told that the engine did not fall within the emission bands ? This apparently means either the car will not be allowed OR I will pay a boat load in tax ?

All this caper is new to me and my Son who is an accountant has tried to explain but I gave up listening in the end.. Mmmmm

So is this new engine a dirty un ?

Can anyone explain in simple terms how it works as I'm beginning to look a mug when I keep giving them blank stares !

[Ex Tiff]

Charlie,

As I understand it the tax you pay on a company car as benefit in kind (BIK) is linked to the CO2 emissions, anything over 130kg/km attracts the highest cost. Hybrid cars such as the Prius are the cheapest and if you can live with the CVT automatic gearbox well worth a look. Simply put try to find something with an emissions figure below 130gm/km the lower the better, alternatively draw up a shortlist and ask your accountant what the damage will be for each.

Best of luck with your search.

For an explanation of the tax rules have a look at the Parkers website http://www.parkers.co.uk/company-cars/ interestingly they give the Evoque as a good choice.

Edited June 11, 2013 by Ex Tiff

[CharlieFarlie]

John it seems the company that suppiles the vehicles has a restriction on what we/I can have.. It is very complex and is why I cant understand what the hell they are on about..

I requested a 2.2 Automatic Rav and was told it was to dirty where a Ford Mondeo 2.2 Automatic is fine.. Now I cant think why but thats what they told me..

Thanks !

[FROSTYBALLS]

EXtract from Which? magazine on company car tax bands:

"Company car tax bands

One of the most important moves towards encouraging greener motoring has been changes to the company car tax regulations.

These were altered back in 2002, to base tax rates around a car’s CO2 emissions. This meant drivers of cars emitting less CO2 paid less ‘Benefit In Kind’ (BIK) tax.

Essentially, a car’s CO2 emissions place it in a band, which gives the percentage BIK tax a driver will pay. The base rate is 10%, for petrol cars producing less than 99g/km of CO2. This lower threshold has been reduced significantly, from 120g/km in 2011-2012.

Company car tax rises by 1% in 5g/km increments, to a maximum of 35% for cars producing 220g/km and above.

Changes announced in the 2013 budget mean that two new company car tax bands giving incentives for low and ultra-low CO2 emissions vehicles will be introduced from April 2015.

The new bands will cover the 0-50g/km CO2 emissions range i.e. hybrid and electric vehicles – and should help improve the take-up of alternatively fuelled fleet and company car vehicles.

In the future tax will be levied on a higher proportion of a company car's list price, with a 1% rise in 2014/15 and a 2% rise the year after. These increases don't affect cars emitting less than 75g/km, although that basically means every car that isn't electric or part-electric (see below).

Company car tax for diesels

At present, the government imposes a further 3% penalty on diesel-engined cars (up to a maximum 35% liability overall) because diesels emit relatively high levels of small particulates, which are damaging at a local, rather than a global, level. The current base BIK rate for diesel cars is 13%.

However, this 3% supplement will be scrapped from 2016, in recognition of the fact that diesels are getting cleaner and more efficient,

Over the years, the limits for each band have been lowered, giving manufacturers an incentive to produce lower-carbon cars. This has had a profound effect on the cars fleets choose, with diesels now dominating the large car sector.

No tax on electric cars

There is no company car tax on electric cars, meaning big savings for anyone who drives an electric company car or van. Instead of the current minimum 10% benefit in kind (BIK) tax, they pay nothing.

The £5,000 Government subsidy on new electric cars remains until 2015"

According to What Car (assuming their figures are up to date) the tax liability for the Rav4 is: two wheel drive versions 20%; four wheel drive versions 24%; four wheel drive CVT 25%. In comparison the Avensis starts at 18% (2.0 D4D T-Spirit 5 door), the Auris starts at 10% for the Hybrid/14% for the 1.4 D4D, the Prius is 10% (Plug-in 5%), and the Verso starts at 20% (2.0 D4D).

I would imagine that companies decide what tax bands they will offer for company cars - which may be why the Rav4 (in 4wd) may be out of the running (but the 2wd may be a possibility).

[Lorna2]

Charlie have a look here http://taxability.toyota.co.uk/BenefitInKind_2.html where they explain how it all works, and they've a calculator here http://taxability.toyota.co.uk/TaxCalculator.html

[FROSTYBALLS]

According to the BIK calculator the new Rav4 Icon 2.2 turbo auto produces a CO2 figure of 176 - so I presume the What Car figures for the Rav4 are inaccurate

[CharlieFarlie]

Mmmm

Thanks for the links but the more I look the more confused I get... I feel the leasing company is just pushing the cars that suits them to be honest.. I can have a 2.2 Auto Mondeo which is fine except I don't want one but they said today I cant have a 2.2 Auto Rav4.......

They just keep hammering me with !Removed! clap trap and figures and terms like BIK and so on.. All I want is the Rav....

[Lorna2]

You're right , I wouldn't be surprised if the leasing company was just pushing the cars that suit them. Or someone who works there is too lazy to go and look up the right info for you.

[firemac]

Mmmm

Thanks for the links but the more I look the more confused I get... I feel the leasing company is just pushing the cars that suits them to be honest.. I can have a 2.2 Auto Mondeo which is fine except I don't want one but they said today I cant have a 2.2 Auto Rav4.......

They just keep hammering me with !Removed! clap trap and figures and terms like BIK and so on.. All I want is the Rav....

Hi Charlie,

The leasing company probably has bought many of its cars forward and then they pass them on to their clients at rates that maximise the leasing company's margins. They work on the premise of pushing the most economical vehicles from a BIK standpoint since most company car drivers are more concerned with the bling factor rather than the driving experience. So you get lots of very CO2 efficient engines optioned up with "business" focused equipment but they are still essentially optioned down to a price.

Why don't you negotiate a monthly car allowance as part of your package rather than taking their car? You will have to pay tax on it at your marginal rate (i.e. the same as for your salary) but at least you can go out and negotiate your own deal on the car that you actually want rather than taking a repmobile. As well as the on-line brokers who give better discounts, it also allows you to look at picking up a nice demonstrator of the make that you really want.

The fact is that HMRC are going to get their numerous pounds of flesh out of you in any event; you may as well try to enjoy what you're driving as they bleed you.

[CharlieFarlie]

As I understand it by taking the allowance option I then go and buy a car with it .. Presumably on some sort of finance agreement ??

I have not had finance for a car for twenty years or more so will not be sighting up for that malarkey no matter whose money is making the payments.

The simple company car seems the safest option with no commitment or risk I'm my part .. Of course I may be getting hold of the wrong end if the stick as I'm that flaming confused I may just tell em where to stick the !Removed! cars...

[firemac]

As I understand it by taking the allowance option I then go and buy a car with it .. Presumably on some sort of finance agreement ??

I have not had finance for a car for twenty years or more so will not be sighting up for that malarkey no matter whose money is making the payments.

The simple company car seems the safest option with no commitment or risk I'm my part .. Of course I may be getting hold of the wrong end if the stick as I'm that flaming confused I may just tell em where to stick the !Removed! cars...

Yep, that's about the size of it. There are ways of doing it but a personal lease deal means that you can tailor the payments, insurance, servicing & maint costs to your allowance. The way these things are structured, you can effectively hand the car back during the period of the lease & walk away - which is exactly what you'd do with a company car if you quit the business.

The personal lease is still finance of course but you are only financing what you are using rather than the whole value of the car which then involves you in trading or selling it to get your residual out of it.

If you don't like the co cars that are on offer and you don't want to source the vehicle of your own choice through alternative means I can't see what options you've got left. It is a fact that more & more people are opting for the car allowance route rather than taking a company vehicle simply because it gives them more choice.

Of course you could go for the car allowance and then simply use your own RAV. That way someone else pays for you using your own car.

[Parts-King]

Charlie, Toyota do a tax calculator to see the effects of all options from all manufacturers, it might help you compare say a Ford to a RAV

http://taxability.toyota.co.uk/home.html

If you need further help, PM me and I will get our Business / Fleet man to give you a call

Kingo

[Big Kev]

Back in the days where I was a Cardboard Box Expert (CBE), one had to be a Philadelphia Lawyer to opt out of the company car scheme. Mileage to and from the office was not tax allowable, mileage records and fuel receipts to prove had to be kept....an absolute PINTA.....

Charlie.....best company car available in you emissions / cost bracket IMHO is the VW Passat. Speaking as an ex employer type, no way would I be financing a Rav 4.4, by your own admission a thirsty gubber at the best of times, min.

Big Kev

[anchorman]

I gave up with company cars in 2003 when I left the motor industry and joined the railway. It seems like the rules haven't changed much in that the CCT (company car tax) rates are linked directly to the emmissions. It is why so many adverts for cars have the CO2 figure as a big feature. I can tell you that you would be able to run a reasonable car with what you will pay in income tax but you wouldn't be able to buy one as well so it will be a benefit despite what many company car drivers will argue.

What affects the CO2 output is basically not much. From what I can see the difference between a 2.2 Mondeo and a 2.2 RAV with auto boxes is only 3%;

http://www.nextgreencar.com/view-car/46681/TOYOTA-RAV-4-2.2-D-CAT-150-Icon-AWD-Auto-Diesel-Automatic

http://www.nextgreencar.com/view-car/36189/FORD-Mondeo-Hatch-2.2-Duratorq-TDCi-Titanium-X-Sport-200PS-Auto-Diesel-Semi-automatic

You can see the effect on CCT if you click the costs tab at the top of each page. So what causes that difference in emmissions? If you take 2 identical RAVs and just start adding passengers that will do it (which is why spare wheels and jacks have to get ejected! - have you seen the size of the handbook on some new cars???). If you leave the engine running at traffic lights that will do it (although starting diesels causes quite a bit more load on the charging system so these stop/go devices tend not to appear on diesels yet). If you increase the power or add an auto box they go out of the roof so that is when they start adding D-CAT systems and no doubt Ford will do something equivelant.

With this in mind you can see that a 4WD 4X4 that is only 3% different is probably quite a clean engine but without many more details it is quite difficult to answer the original question. I know that RAVs with D-CATs have emmissions several points of one percent lower carbon emmissions than those without but at the cost of fuel consumption. That carbuncle we carry in Brussels obviously has enough pull to force Toyota's hand on the issue. I suppose we only have one planet.

[CharlieFarlie]

Back in the days where I was a Cardboard Box Expert (CBE), one had to be a Philadelphia Lawyer to opt out of the company car scheme. Mileage to and from the office was not tax allowable, mileage records and fuel receipts to prove had to be kept....an absolute PINTA.....

Charlie.....best company car available in you emissions / cost bracket IMHO is the VW Passat. Speaking as an ex employer type, no way would I be financing a Rav 4.4, by your own admission a thirsty gubber at the best of times, min.

Big Kev

Kev I don't have to pay for fuel except for private mileage which will be very minimal...

After some conversations today it seems my suspicions are right in that the leasing company who now supply the vehicles ( When I owned the firm I purchased all vehicles outright)are reluctant to supply a new Rav as they cant buy them cheap enough...

Im still on the case and haven't given up yet but to be honest its looking more like a blue oval than anything else..

[anchorman]

I wouldn't go out and buy a new Mondeo but I wouldn't go out and buy a new Avensis either. I certainly wouldn't turn my nose up at any new D segment car if the company was coughing up. Can you have a Kuga?

I don't miss the negative tax codes and they will almost certainly want you to fill in the most vile of all forms if it takes you over the 40% threshold - the tax return. You are probably used to them or can still get your accountant to do it but it wasn't my favourite bed time reading.