With an increase in VAT seeming more and more likely I was wondering whether this should influence my decision over when to go back into the company car scheme at work. I can do this at any time, I just need to make decision about the car itself. Is BIK calculated on the cost inc. VAT or not (what I believe is called the P11D value)? If VAT is included does the P11D value change over the term you have the car, or is it just taken at the start - in other words will a VAT increase say 6 months from now increase my BIK liability if I'm already in the car scheme?
In case it makes a difference it's a 4 year / 120,000 mile lease term.
Thanks
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AFAIK it is based on the full list price including extras at the time of delivery / start of lease, it does not change pver the years you have the car
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But that list price does include VAT. I've been out of the BIK world for a while but I believe the value is fixed at the time the car is first made available to you, so I suspect the only people whose BIK benefited from the 2009 drop in VAT were those who changed cars in that year.
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the P11d value of the car, (thats the amount you pay tax on) is the full retail on the road cost of the car at the time it is made available to you. This value will remain constant through your lease period.
So in short, if you want a company car, get it before purchase taxes rise.
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AFAIK P11D price is the full list price + full list price of any extras. It doesn't include cost of first registration and VED.
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You will be taxed on the full P11D price which includes any extras, number plates and delivery and probably bears no resemblance to the price paid by the leasing company or your employer. Neither will it bear much relationship to the actual benefit in kind for that matter, but that's not the point. I don't see a 4 year old 120K mile car as much of a benefit myself.
This includes the VAT, I have to admit I benefited as my current car was delivered during the temporary 15% VAT rate, incidentally it made virtually no difference to the lease cost (originally quoted during the standard 17.5% rate in late 2008) as AFIK the lease is generally net of VAT and the leasing company sorts out VAT when it buys and sells the car.
Order soon, although who-knows what other taxation changes are coming our way, you will become (as a company car driver) a 'soft target' for the chancellor of the exchequer, whatever his political persuasion this week.
Last edited by: idle_chatterer on Thu 13 May 10 at 20:27
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Thanks for the replies everyone, looks like a quick decision and order is in, er, order. My mind is pretty much made up, partly because Skoda don't seem interested in letting me go for a drive in a Superb estate and Mazda gave me a 6 estate for 2 days. Most other things are poor value by comparison on the lease rates.
I too wouldn't consider a 4 year old / 120,000 mile car much of a benefit either but by the time that comes round I'll be able to get a new one.
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Possible VAT increase and BIK - commerdriver
