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Hi all, just joined this group so look forward to sharing info and view.
First up from me - BIK (aka Benefit In Kind)
My Question; I've just received my first annual review letter from the CMS and asides from my ex-spouse informing the CMS that I have my children less nights than is true (an issue for another day!), the CMS have apparently received notification from HMRC which states my taxable earnings have increased by £6000/year, which is untrue as I have received no pay increases. Having done a bit of research, I then find out that CMS bases its payment calcs on the 'total taxable earnings' (less pension contributions).
So I have deduced this is all down to my new company car (which I am very privileged to have as certainly could not afford to buy, or run/maintain a car of my own!) and I have serious questions about how the CMS can expect a father to pay more on the basis of a taxable benefit, whereby no additional salary is paid on a monthly basis. Let's just say for arguments sake that a father joins a new company as a sales rep and that the package comes with a company car, which was a 'pool car' (common? Yes as corperate leases on vehicles are typically 3-5 years) - and this pool car happens to be - and I know this is an extreme case - a £70,000 Tesla (EV's are the way forward, right? And judging by Elon's 'Starman' recently making his television debut, he may be the 'driver' to add a layer of normality to driverless 'driving'!) - so as a 40% tax payer, your new taxable income will increase due to tax rate of said car. So a) you are paying MORE in tax for this vehicle (mandaroty to fulfull the purpose of your job) and now, through no fault of your own, have to pay a much higher level of Child Maintenance based on the hike in BIK ...
I can't help thinking there must be a way round this (other than opting-out of use of a company car altogether which isnt an option for most roving salespeople). Does anyone know of a route to have this type of situation reviewed?
Thanks,
Starman aka Wannabe Tesla driver
Hi There,
.
I don't think there is any way around this, a company car forms part of your wage in effect, so although it gets called BIK, personally I don't believe it should be,
.
GTTS
Hi
I don't know the full ins and outs of company cars, but generally, if you opt out of a company car, you would expect to get a pay increase on the basis that you'd have to pay to run your own car, so you be assessed on a higher income, which would have the same effect as being taxed on the car. I imagine that the CMS and HMRC have a fair bit of experience with company cars being part of the assessment.
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