07-01-2018, 10:41
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#1
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Guest
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Salary Calculation
Hi all,
I'm employed with a yearly salary and also have a car allowance paid monthly.
How do I work out how much tax I pay on that car allowance?
Cheers
Lee
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07-01-2018, 10:57
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#2
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CF Resident Dog
Join Date: Mar 2005
Posts: 14,266
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Re: Salary Calculation
__________________
PSN: Snoopzster
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07-01-2018, 11:26
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#3
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Guest
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Re: Salary Calculation
Quote:
Originally Posted by SnoopZ
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No - they are for company cars. I have a monthly car allowance...not a company supplied vehicle.
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07-01-2018, 11:46
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#4
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CF Resident Dog
Join Date: Mar 2005
Posts: 14,266
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Re: Salary Calculation
Quote:
Originally Posted by LSainsbury
No - they are for company cars. I have a monthly car allowance...not a company supplied vehicle.
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You may find something here, the rules for this changed in April 2017 so you will have to read more on that page to see if it helps.
https://www.clm.co.uk/company-car-tax/
Quote:
Cash allowance change example
For a petrol car emitting 120 g/km with a P11D value of £15,000, the tax for 2016/17 would currently be due at your highest tax rate on £3,150 (list price of £15,000 x 21%). If your marginal rate of tax was 40% you’d end up paying £1,260 in tax. Your employer would also pay class 1A NIC on the same value.
If you had the option of taking a cash alternative of £4,000, under the new rules this would be taxed rather than the £3,150. So the tax you’d actually pay would go up from £1,260 to £1,600.
However, if the cash allowance was £3,000 the tax you’d pay would be calculated on the £3,150 as before.
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---------- Post added at 11:46 ---------- Previous post was at 11:42 ----------
There is also a cash allowance calculator here.
https://comcar.co.uk/cashorcar/
__________________
PSN: Snoopzster
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07-01-2018, 15:48
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#5
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Guest
Location: Near Hungerford, West Berkshire
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Re: Salary Calculation
Nope!
That's selecting a company car again.
All I need to know is how much of my car allowance is deducted for tax.
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07-01-2018, 15:54
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#6
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Guest
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Re: Salary Calculation
Quote:
Originally Posted by LSainsbury
Nope!
That's selecting a company car again.
All I need to know is how much of my car allowance is deducted for tax.
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I had a car allowance when I worked and the allowance was classed as part of my salary, I paid tax on my combined salary/car allowance at the tax rate that I sat in.
You can also claim tax relief on your mileage under the allowable expenses section on your tax return
Last edited by Mr Banana; 07-01-2018 at 15:59.
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07-01-2018, 17:18
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#7
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cf.addict
Join Date: Feb 2006
Location: Peterborough
Age: 63
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Posts: 315
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Re: Salary Calculation
If you are a basic rate taxpayer then the following gives you how much tax you pay on your combined monthly salary/car allowance.
Tax = (Monthly Gross Salary + Car Allowance - 1054.17) x 0.2
This gives you the total tax paid in a month.
To work out how much tax you pay on your car allowance use the following.
(Car Allowance / Salary) x Tax(from above)
Obviously this is approximate figures.
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07-01-2018, 21:13
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#8
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Guest
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Re: Salary Calculation
Quote:
Originally Posted by Mr Banana
I had a car allowance when I worked and the allowance was classed as part of my salary, I paid tax on my combined salary/car allowance at the tax rate that I sat in.
You can also claim tax relief on your mileage under the allowable expenses section on your tax return
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I had a feeling that would be the answer - combine both and then deduct the tax.
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