Get on your bike!

Tony Raven said:

Accountingweb reports that the private car for company business in
coming under tax threat and that the answer is a bicycle.
http://www.accountingweb.co.uk/cgi-bin/item.cgi?id=155176&d=448

A bit "hard done by motorist" but at least it reaches the right
conclusion at the end.

'restricted access'

cupra said:

Tony Raven said:

Accountingweb reports that the private car for company business in
coming under tax threat and that the answer is a bicycle.
http://www.accountingweb.co.uk/cgi-bin/item.cgi?id=155176&d=448

A bit "hard done by motorist" but at least it reaches the right
conclusion at the end.

'restricted access'

Sorry, must have a cookie set:

TAX FEATURE: Get on your bike - Has HMRC got it in for company cars? By
Rebecca Benneyworth

With the rail system under criticism from a senior committee of MPs,
HMRC have recently announced that they will be further turning up the
heat for drivers. Not content with virtually driving the company car off
the road, HMRC now intend to raise additional tax from drivers who have
switched to their own car for business journeys.

A second stage evaluation of the company car tax reforms implemented in
2002 were published as part of the Budget earlier this year. HMRC
updated the work done previously with more data, and studied additional
aspects of the impact of the new car tax regime.

The report welcomed the part company car drivers have played in reducing
carbon emissions - it estimates that average emissions from company cars
in 2004 were around 15g/km lower than they would have been if the
reforms had not taken place. However, it admitted that where car drivers
no longer have a company car, they are likely choose private cars with
higher emissions figures of around 5g/km.

Nevertheless, the change in the tax rules has encouraged many drivers to
give up their company cars – around 400,000 drivers who had company cars
in 2001 no longer had one by 2005. Many of these drivers have been
offered an alternative arrangement for business journeys by their
employers, and it is this arrangement that HMRC is now seeking to look
at in order to raise extra tax.

The report on the company car reforms indicates that there has been a
decrease in tax and NIC’s collected as a result of the reforms, as many
drivers have switched to driving lower emission cars (including low
emission diesels), but also because the provision of company cars has
tailed off, with private cars replacing the company car for some
drivers. The overall effect of the emissions tax was supposed to be
revenue neutral, but it would now seem that the Exchequer losses now
amount to £435 million in total from 2002 to 2006. Annual losses are
running at more than £100 million a year.

So have the reforms have worked better than was hoped? Or were the
predictions of tax neutrality not accurate enough. It is difficult when
tax is used as a tool to change behaviour, particularly when the change
will come from the interaction of the behaviour of both employer and
employee, but surely common sense suggests that both results of the
company car reform are not difficult to predict in qualitative terms,
even of the quantum proves more challenging.

In particular, the area now under scrutiny, employee car ownership
schemes (ECOS) should have been part of the initial considerations. Some
employers, faced with car drivers no longer wishing to be provided with
a company car have provided a salary increment (often known as a car
allowance) which is subject to tax and NIC in the normal way. You could
view the car allowance as putting the driver in funds to provide his own
car, or alternatively as a salary replacement for the loss of the
benefit of having a company car provided for private travel.

The employer normally then pays the driver a low rate per mile for his
business journeys, intended to reflect the fact that part of the cost of
the journey has already been met by the company. The rates paid by
employers can be taken to represent the variable costs of the journey,
but often employers pay a “fuel only” rate.

In tax terms, now that the employee has suffered tax on his car
allowance, he may treat the Authorised Mileage Allowance Payments scheme
(AMAPs) as applying to his car, and may claim a tax refund on the
shortfall in payments between the authorised rate of 40p for the first
10,000 miles, and 25p per mile thereafter.

Not surprisingly, many drivers, and particularly those who do not travel
too often by car for business, find that they are better off with this
option than paying a substantial tax bill on a company car. They form
the substantial part of the 400,000 who have switched out of company car
ownership. Now, HMRC turns attention to them in the hope of replacing
the lost tax revenues. Not lost completely, of course, but hidden within
normal PAYE and NIC take.

The suggestion in the announcement of a study on ECOS is to establish
whether employees are gaining a benefit under these schemes (they are,
as the financial aspect is what encourages many to choose this method of
business motoring) and if so, to seek to tax that benefit. This would
not seem a sensible suggestion, given that the arrangement is not an
avoidance of tax, and is adequately covered by the tax rules. But is
this just part of replacing these 'lost tax revenues'?

So the company car driver is a dying breed, and now employee cars are
under attack. We can’t use the trains which are hopelessly overcrowded
and drastically overpriced, and flying is the least green option of all.
But help is at hand. It is possibly a little known fact that the rate
per mile for use of a bicycle (your own) on business travel is 20p (with
no mileage limit), so as the man said some years ago, perhaps it is now
time to “get on your bike”!

--
Tony

"Anyone who conducts an argument by appealing to authority is not using
his intelligence; he is just using his memory."
- Leonardo da Vinci

Tony Raven said:

cupra said:

Tony Raven said:

Accountingweb reports that the private car for company business in
coming under tax threat and that the answer is a bicycle.
http://www.accountingweb.co.uk/cgi-bin/item.cgi?id=155176&d=448

A bit "hard done by motorist" but at least it reaches the right
conclusion at the end.

'restricted access'

Sorry, must have a cookie set:

TAX FEATURE: Get on your bike - Has HMRC got it in for company cars?
By Rebecca Benneyworth

With the rail system under criticism from a senior committee of MPs,
HMRC have recently announced that they will be further turning up the
heat for drivers. Not content with virtually driving the company car
off the road, HMRC now intend to raise additional tax from drivers
who have switched to their own car for business journeys.

<snip>

Thanks for that - interesting read.

I've no problem with taxing benefit in kind, but if I end up losing out when
driving to see a customer I'd be pretty hacked off! I would love to have a
job where I could use a bike, but in my line of business it's a tad
impractical.

cupra said:

Thanks for that - interesting read.

I've no problem with taxing benefit in kind, but if I end up losing out when
driving to see a customer I'd be pretty hacked off! I would love to have a
job where I could use a bike, but in my line of business it's a tad
impractical.

Needs must!. I had a friend a few years ago who was a sales rep for
Avery weigh scales and lost his license for drink driving. To his
credit he managed to keep his job using public transport which, given
what shop weigh scales weigh was no mean feat. But is shows it can be
done. With my Brompton and trains I've cut my car mileage by about 10k
miles per year and am getting to the point where I resent having to
drive because its such a waste of time compared to what you can do sat
on a train.

--
Tony

"Anyone who conducts an argument by appealing to authority is not using
his intelligence; he is just using his memory."
- Leonardo da Vinci

Tony Raven said:

cupra said:

Thanks for that - interesting read.

I've no problem with taxing benefit in kind, but if I end up losing
out when driving to see a customer I'd be pretty hacked off! I would
love to have a job where I could use a bike, but in my line of
business it's a tad impractical.

Needs must!. I had a friend a few years ago who was a sales rep for
Avery weigh scales and lost his license for drink driving. To his
credit he managed to keep his job using public transport which, given
what shop weigh scales weigh was no mean feat.

I'd lose my job if I had to rely on PT!

Quoted message said:

But is shows it can
be done. With my Brompton and trains I've cut my car mileage by
about 10k miles per year and am getting to the point where I resent
having to drive because its such a waste of time compared to what you
can do sat on a train.

Fortunately I can work from home when I want to, so I've cut about 5-6K off
my mileage for office trips - leaves me plenty of time to get out in the
hills at 5pm 🙂

On Wed, 24 May 2006 14:25:10 +0100, Tony Raven <[email hidden]>

Quoted message said:

A bit "hard done by motorist" but at least it reaches the right
conclusion at the end.

Hmmm.

Lets see. Heres a plan. Persuade my company to rent my garden shed
for 1p per decade or part decade. Now my commute becomes a trip
between company premises.

Claim bicycle allowance of £0.2 on 8000 miles. Tax Allowance is now
£1600 higher ie £352 extra pay per year, £29.33 a month which will
pay for all the bicycle maintenance. Yippee :-)

HMRC probably wouldn't allow it. Damn!

On Wed, 24 May 2006 15:03:18 +0100 someone who may be Tony Raven
<[email hidden]> quoted this:-

Quoted message said:

So the company car driver is a dying breed,

My heart bleeds.

Quoted message said:

and now employee cars are under attack.

Somewhat strong. People are being encouraged not to use them would
be an accurate description.

Quoted message said:

We can’t use the trains which are hopelessly overcrowded

Are they really? That rather depends on which train one is looking
at, rather like roads in fact.

Quoted message said:

and drastically overpriced,

Well public transport fares have certainly gone up dramatically,
while the cost of motoring has gone down slightly. However, there
are a range of offers, some of which are available on the day at the
right time, to avoid the worst of this.

--
David Hansen, Edinburgh
I will *always* explain revoked encryption keys, unless RIP prevents me
http://www.opsi.gov.uk/acts/acts2000/00023--e.htm#54

David Hansen said:

On Wed, 24 May 2006 15:03:18 +0100 someone who may be Tony Raven
<[email hidden]> quoted this:-

Quoted message said:

So the company car driver is a dying breed,

My heart bleeds.

Much of the dying is due to industrial injuries. Or car accidents, as they
are known

Quoted message said:

Quoted message said:

and now employee cars are under attack.

Somewhat strong. People are being encouraged not to use them would
be an accurate description.

Quoted message said:

We can't use the trains which are hopelessly overcrowded

Are they really? That rather depends on which train one is looking
at, rather like roads in fact.

I chose to read it as We can't use the trains which are hopelessly
overcrowded [but the other ones work just fine]

--
Ambrose

David Hansen said:

Quoted message said:

We can’t use the trains which are hopelessly overcrowded

Are they really? That rather depends on which train one is looking
at, rather like roads in fact.

Last week's journey to visit the parents and back was typical of my
train travel. A total of a little over 11 hours on 5 trains.
Just one short stretch where it got so horrendously overcrowded that
someone was sitting opposite me, so I had to take some care over where
the legs went.

But then, who cares about reality when having a moan?

--
not me guv

Nick Kew said:

Last week's journey to visit the parents and back was typical of my
train travel. A total of a little over 11 hours on 5 trains.
Just one short stretch where it got so horrendously overcrowded that
someone was sitting opposite me, so I had to take some care over where
the legs went.

But then, who cares about reality when having a moan?

Your experience is different to mine but I tend to travel nearer peak
times. I've always got a seat over the past couple of weeks but the
seats around me have all been occupied and some people have been standing.

--
Tony

"Anyone who conducts an argument by appealing to authority is not using
his intelligence; he is just using his memory."
- Leonardo da Vinci

"Nick Kew" wrote

Quoted message said:

Last week's journey to visit the parents and back was typical of my
train travel. A total of a little over 11 hours on 5 trains.

So how long would it have taken to cycle?

David Hansen said:

On Wed, 24 May 2006 15:03:18 +0100 someone who may be Tony Raven
<[email hidden]> quoted this:-

Quoted message said:

So the company car driver is a dying breed,

My heart bleeds.

Quoted message said:

and now employee cars are under attack.

Somewhat strong. People are being encouraged not to use them would
be an accurate description.

The problem is any change in rules will affect people who *need* to drive to
visit customers, not those who have the car as a perk.

<snip>

cupra said:

The problem is any change in rules will affect people who *need* to drive to
visit customers, not those who have the car as a perk.

Mosty people who "need" to drive to visit customers should update their
working practices into this century. That includes, for example, anyone
in a job where wearing a suit would be even a possibility.

Of course there are people who have a real reason to drive for work.
If you want to change the rules without penalising them, that's easy:
in fact we already do have different rules for vans compared to cars.

--
not me guv

cupra said:

The problem is any change in rules will affect people who *need* to drive to
visit customers, not those who have the car as a perk.

Easily fixed. You only get taxed on a company car if you use it for
personal journeys. So if its essential for work, have a company car,
use it only for work and use your own vehicle for your private journeys.
No tax, no cost for business journeys, sorted.

--
Tony

"Anyone who conducts an argument by appealing to authority is not using
his intelligence; he is just using his memory."
- Leonardo da Vinci

On Thu, 25 May 2006 14:17:14 +0100, Tony Raven <[email hidden]>

Quoted message said:

cupra said:

The problem is any change in rules will affect people who *need* to drive to
visit customers, not those who have the car as a perk.

Easily fixed. You only get taxed on a company car if you use it for
personal journeys.

I understood it was if it was available for personal journeys
(perfectly reasonable, there's value in having something available
without actually needing to use it)

Jim.

Tony Raven said:

cupra said:

The problem is any change in rules will affect people who *need* to
drive to visit customers, not those who have the car as a perk.

Easily fixed. You only get taxed on a company car if you use it for
personal journeys. So if its essential for work, have a company car,
use it only for work and use your own vehicle for your private
journeys. No tax, no cost for business journeys, sorted.

That's no difference to using a private car for company use - I don't have a
problem with the perk users who lose out.

Nick Kew said:

cupra said:

The problem is any change in rules will affect people who *need* to
drive to visit customers, not those who have the car as a perk.

Mosty people who "need" to drive to visit customers should update
their working practices into this century.

Can't be done with my role unless all OEM manufacturers could be reached by
PT at any time, often at short notice - ie: impossible.

Quoted message said:

That includes, for
example, anyone in a job where wearing a suit would be even a
possibility.

I don't wear one.

Quoted message said:

Of course there are people who have a real reason to drive for work.
If you want to change the rules without penalising them, that's easy:
in fact we already do have different rules for vans compared to cars.

The car isn't provided, it belongs to me (hence I'll drive what I want to)-
the loser will be businesses who'll have to compensate for the losses
suffered by the business mileage user and the winner will be.... yep - the
treasury.

Jim Ley said:

Tony Raven said:

cupra said:

The problem is any change in rules will affect people who *need*
to drive to visit customers, not those who have the car as a
perk.

Easily fixed. You only get taxed on a company car if you use it
for personal journeys.

I understood it was if it was available for personal journeys
(perfectly reasonable, there's value in having something available
without actually needing to use it)

Yes and if the company says its for company journeys only and not to
take it home or use it privately it is not available for personal
journeys. Postmen don't pay tax on driving post office vans or
policemen on police cars.

--
Tony

"Anyone who conducts an argument by appealing to authority is not using
his intelligence; he is just using his memory."
- Leonardo da Vinci

cupra said:

Tony Raven said:

cupra said:

The problem is any change in rules will affect people who *need* to
drive to visit customers, not those who have the car as a perk.

Easily fixed. You only get taxed on a company car if you use it for
personal journeys. So if its essential for work, have a company car,
use it only for work and use your own vehicle for your private
journeys. No tax, no cost for business journeys, sorted.

That's no difference to using a private car for company use - I don't have a
problem with the perk users who lose out.

Except we are discussing private car for company use users losing out
with proposed tax changes.

--
Tony

"Anyone who conducts an argument by appealing to authority is not using
his intelligence; he is just using his memory."
- Leonardo da Vinci