What can I do? Any help appreciated

M40CCA · 08-21-2016, 04:45 PM

I think I am going to have to sell my 335d because of the mortgage I am having to get

My situation is this

My wife is pregnant with our 2nd child and I have 2 girls that stay with me on a weekend. At the moment we are in a 3 bedroom house so need to move

I run my car as my own personal one through my family business and claim back my mileage to cover the payment every month, which gets paid back to me as expenses on my wage slip, so one I don't get taxed on the payments as I would if it was a car allowance and also it would put my annual salary into the 40% tax bracket
Now when I have gone to the bank to borrow more for the bigger house they have said that because my car is paid as a expense they cannot take it as part of my wage because if I was off sick or not at work the mileage would not be claimed therefore the car payment would not be covered. This would never be the case because of it been my fathers business the car payment would always be covered no matter what but trying to explain this to the bank wouldn't stick
The bank have said without the car payment which is £598/mth I could borrow easily enough to cover what I need
I really don't want to sell the car but my family has to come first

So unless someone knows of a way round this it's going to have to be done

Would a BMW garage buy the car from me for cash?

If I were to sell privately would the finance have to be settled first or can it be done there with the new buyer at the bank?

on_the_virge · 08-21-2016, 04:52 PM

i sold a car with Finance on it and got the buyer to settle the outstanding amount to the finance co and pay me the balance but I am not sure if all finance cos allow this otherwise it will be a case of settling this prior to sale and repaying with the proceeds. Can't you for the sake of the mortgage put the car as car allowance and then swap back after???

badgerbrock72 · 08-21-2016, 04:53 PM

shot in the dark, but are you applying for the mortgage in your name only (and therefore only taking into account your salary?)

if so, could you transfer the car finance into your wife's name..... then wait a while till it drops off your credit file, and then apply for the mortgage?

might be talking bolox but anything is worth a try?

feel for you mate

Garry

CazuaLLUK · 08-21-2016, 04:57 PM

Quote:

Originally Posted by badgerbrock72

if so, could you transfer the car finance into your wife's name..... then wait a while till it drops off your credit file, and then apply for the mortgage?

Or even a family member which you could pay the money to, while the move goes through to continue with the car.

M40CCA · 08-21-2016, 04:59 PM

Quote:

Originally Posted by on_the_virge

i sold a car with Finance on it and got the buyer to settle the outstanding amount to the finance co and pay me the balance but I am not sure if all finance cos allow this otherwise it will be a case of settling this prior to sale and repaying with the proceeds. Can't you for the sake of the mortgage put the car as car allowance and then swap back after???

I did ask this and they said it would have to be shown on the wage slips for at least 3mth before I could apply
And my problem is I've just accepted a offer on mine suppose I could always move in with my parents for a while

M40CCA · 08-21-2016, 05:00 PM

Quote:

Originally Posted by CazuaLLUK

Quote:

Originally Posted by badgerbrock72

if so, could you transfer the car finance into your wife's name..... then wait a while till it drops off your credit file, and then apply for the mortgage?

Or even a family member which you could pay the money to, while the move goes through to continue with the car.

It's how quick I can get the finance removed from my credit file mate

M40CCA · 08-21-2016, 05:01 PM

Quote:

Originally Posted by badgerbrock72

shot in the dark, but are you applying for the mortgage in your name only (and therefore only taking into account your salary?)

if so, could you transfer the car finance into your wife's name..... then wait a while till it drops off your credit file, and then apply for the mortgage?

might be talking bolox but anything is worth a try?

feel for you mate

Garry

The mortgage is in a joint application mate

CazuaLLUK · 08-21-2016, 05:02 PM

Quote:

Originally Posted by M40CCA

It's how quick I can get the finance removed from my credit file mate

Find out who the bank uses to check your file. They usually have a preferred company. Most seems to be Equifax or Experian. I am pretty sure if it urgent they 'could' do something to help or at least give you a time frame.

E60MKF · 08-21-2016, 05:04 PM

Seeing as your wife is only pregnant right now, do you need a house now? Surely, for the first few months to 12 months, the new arrival will stay in your room so you can take time over the decision as to what to do with the car and picking the house too

E60MKF · 08-21-2016, 05:05 PM

Quote:

Originally Posted by CazuaLLUK

Find out who the bank uses to check your file. They usually have a preferred company. Most seems to be Equifax or Experian. I am pretty sure if it urgent they 'could' do something to help or at least give you a time frame.

I think some said on here halifax or santander don't care about car finance, search the UK F30 forum as this has come up before and there was a lot of chat about it

hope it helps!!

M40CCA · 08-21-2016, 05:07 PM

Quote:

Originally Posted by E60MKF

Quote:

Originally Posted by CazuaLLUK

Find out who the bank uses to check your file. They usually have a preferred company. Most seems to be Equifax or Experian. I am pretty sure if it urgent they 'could' do something to help or at least give you a time frame.

I think some said on here halifax or santander don't care about car finance, search the UK F30 forum as this has come up before and there was a lot of chat about it

hope it helps!!

It's Santander who I'm with at the moment so it might be Halifax I'll check it out tomorrow

Thanks mate

mpawood · 08-21-2016, 06:31 PM

I'm confused as to how you claim back mileage to cover the cost of the car payment?

Do you claim £600 regardless of miles done? Or are you saying the mileage you do is enough so that difference in cost of fuel and 45p is enough to cover car payment? I'm sure it can't be the latter as that's well over 10k miles a year.

If it is indeed the former then you've shot yourself in the foot in order to evade tax?

Notechy · 08-22-2016, 02:00 AM

Quote:

Originally Posted by mpawood

I'm confused as to how you claim back mileage to cover the cost of the car payment?

Do you claim £600 regardless of miles done? Or are you saying the mileage you do is enough so that difference in cost of fuel and 45p is enough to cover car payment? I'm sure it can't be the latter as that's well over 10k miles a year.

If it is indeed the former then you've shot yourself in the foot in order to evade tax?

All looks a bit dodgy to me too. Nevertheless, an alternative approach......

Father to act as guarantor on the new mortgage? Assuming that he cannot simply lend you the money?

MashinBenzin · 08-22-2016, 03:12 AM

Give this guy a shout, he is fantastic on mortgages and the best lender for your individual circumstances. If it can be done, Liam will know how to do it...

http://www.lt-mortgages.com/

I've used him, and he comes highly recommended by loads of people over on pistonheads (which is how I found out about him).

ETA: He is very quick, so you'll probably have an inidicative answer with his opinion in minutes or very few hours

isleaiw1 · 08-22-2016, 03:41 AM

Quote:

Originally Posted by mpawood

I'm confused as to how you claim back mileage to cover the cost of the car payment?

Do you claim £600 regardless of miles done? Or are you saying the mileage you do is enough so that difference in cost of fuel and 45p is enough to cover car payment? I'm sure it can't be the latter as that's well over 10k miles a year.

If it is indeed the former then you've shot yourself in the foot in order to evade tax?

It seems to be that as its a family business you get a bigger salary for a few months to cover car payment and what you need and then when sorted and complete you can go back to how it is now (which by the way sounds suspiciously like a tax dodge so you may want to rephrase how you describe it....)

I'd suggest you have time. delay sale of yours - cant believe you went ahead with attempt to sell it before you knew how you would finance the new one....

MashinBenzin · 08-22-2016, 03:46 AM

Don't feel the time pressure too much and don't reveal all to your estate agent/buyer.

You've accepted an offer, but that will only become legally binding once you exchange contracts - which is probably months away.

Take your time, talk to Liam (or another independent mortgage advisor if you have a recommendation), consider your circumstances from all angles before making any rushed decisions on anything car or house related

Watsey · 08-22-2016, 03:55 AM

Fundamentally there are three ways to provide or help to fund a vehicle for an employee :

1. Fully funded company car : the company pays for all vehicle running costs, including the lease and fuel, and the employee pays BIK tax.
2. Partially funded company car : same as above, but no 'free' fuel.
3. Car allowance : employee is provided with a car allowance and provides the vehicle - employee then claims business mileage expenses from the employer based upon actual mileage. The car allowance is classed as income, just like salary, and is taxed as such. The mileage rate doesn't have to be HMRC mileage compliant, but any mileage (pence per mile, based upon engine size and fuel) will be taxable. HMRC compliant mileage claims are not taxed, although the compliant mileage rates are reduced when annual mileage exceeds 10,000 miles.

If you are claiming the lease cost each month, irrespective of mileage, and classing the payments as expenses rather than income then you and your employer are on the wrong side of the line. Making a false declaration to HMRC in your annual return and then being audited will likely lead to a full audit going back 6-7 years with all tax being due, interest charges, and penalties (fines).

Who advised you to simply claim the entire cost of the lease of your car as an expense, irrespective of the actual business mileage ?

In terms of expenses and mortgage applications, most lenders will not recognise expenses as they represent (of course) reimbursement for a cost incurred - not as an income.

JNW1 · 08-22-2016, 04:13 AM

Quote:

Originally Posted by Watsey

Fundamentally there are three ways to provide or help to fund a vehicle for an employee :

1. Fully funded company car : the company pays for all vehicle running costs, including the lease and fuel, and the employee pays BIK tax.
2. Partially funded company car : same as above, but no 'free' fuel.
3. Car allowance : employee is provided with a car allowance and provides the vehicle - employee then claims business mileage expenses from the employer based upon actual mileage. The car allowance is classed as income, just like salary, and is taxed as such. The mileage rate doesn't have to be HMRC mileage compliant, but any mileage (pence per mile, based upon engine size and fuel) will be taxable. HMRC compliant mileage claims are not taxed, although the compliant mileage rates are reduced when annual mileage exceeds 10,000 miles.

If you are claiming the lease cost each month, irrespective of mileage, and classing the payments as expenses rather than income then you and your employer are on the wrong side of the line. Making a false declaration to HMRC in your annual return and then being audited will likely lead to a full audit going back 6-7 years with all tax being due, interest charges, and penalties (fines).

Who advised you to simply claim the entire cost of the lease of your car as an expense, irrespective of the actual business mileage ?

In terms of expenses and mortgage applications, most lenders will not recognise expenses as they represent (of course) reimbursement for a cost incurred - not as an income.

Is that what he's doing though? My interpretation was that he was doing a relatively high business mileage and, rather than have a company car or car allowance, he was just claiming mileage at the prevailing rate for a private car (45p for the first 10k miles, 25p thereafter) and that was covering his monthly finance repayment? However, if he's doing as you suggest - and claiming the monthly finance cost regardless of mileage travelled - I agree he (and his company) are straying the wrong side of the line!

mpawood · 08-22-2016, 04:22 AM

Quote:

Originally Posted by JNW1

Quote:

Originally Posted by Watsey

Fundamentally there are three ways to provide or help to fund a vehicle for an employee :

1. Fully funded company car : the company pays for all vehicle running costs, including the lease and fuel, and the employee pays BIK tax.
2. Partially funded company car : same as above, but no 'free' fuel.
3. Car allowance : employee is provided with a car allowance and provides the vehicle - employee then claims business mileage expenses from the employer based upon actual mileage. The car allowance is classed as income, just like salary, and is taxed as such. The mileage rate doesn't have to be HMRC mileage compliant, but any mileage (pence per mile, based upon engine size and fuel) will be taxable. HMRC compliant mileage claims are not taxed, although the compliant mileage rates are reduced when annual mileage exceeds 10,000 miles.

If you are claiming the lease cost each month, irrespective of mileage, and classing the payments as expenses rather than income then you and your employer are on the wrong side of the line. Making a false declaration to HMRC in your annual return and then being audited will likely lead to a full audit going back 6-7 years with all tax being due, interest charges, and penalties (fines).

Who advised you to simply claim the entire cost of the lease of your car as an expense, irrespective of the actual business mileage ?

In terms of expenses and mortgage applications, most lenders will not recognise expenses as they represent (of course) reimbursement for a cost incurred - not as an income.

Is that what he's doing though? My interpretation was that he was doing a relatively high business mileage and, rather than have a company car or car allowance, he was just claiming mileage at the prevailing rate for a private car (45p for the first 10k miles, 25p thereafter) and that was covering his monthly finance repayment? However, if he's doing as you suggest - and claiming the monthly finance cost regardless of mileage travelled - I agree he (and his company) are straying the wrong side of the line!

Pretty sure he is claiming despite miles travelled. Firstly you'd have to travel a fair few miles to achieve 600 in expenses each month (1800 a month or so). Secondly he said that he would still receive the expenses if he was unable to work...

JNW1 · 08-22-2016, 04:40 AM

Quote:

Originally Posted by mpawood

Pretty sure he is claiming despite miles travelled. Firstly you'd have to travel a fair few miles to achieve 600 in expenses each month (1800 a month or so). Secondly he said that he would still receive the expenses if he was unable to work...

Obviously depends on the nature of your job but I suspect there are plenty of people who do 2k business miles a month (or more!).

You may be right about the reference to receiving expenses anyway but I took that to mean that because it's his father's company he was saying his dad would see him right even if he was unable to claim mileage for any reason (e.g. an extended period of sick leave). However, that's really saying his dad will act as a guarantor should times become difficult and I think that's already been flagged as a potential solution earlier in the thread!

Watsey · 08-22-2016, 04:44 AM

Quote:

Originally Posted by JNW1

Quote:

Originally Posted by Watsey

Fundamentally there are three ways to provide or help to fund a vehicle for an employee :

1. Fully funded company car : the company pays for all vehicle running costs, including the lease and fuel, and the employee pays BIK tax.
2. Partially funded company car : same as above, but no 'free' fuel.
3. Car allowance : employee is provided with a car allowance and provides the vehicle - employee then claims business mileage expenses from the employer based upon actual mileage. The car allowance is classed as income, just like salary, and is taxed as such. The mileage rate doesn't have to be HMRC mileage compliant, but any mileage (pence per mile, based upon engine size and fuel) will be taxable. HMRC compliant mileage claims are not taxed, although the compliant mileage rates are reduced when annual mileage exceeds 10,000 miles.

If you are claiming the lease cost each month, irrespective of mileage, and classing the payments as expenses rather than income then you and your employer are on the wrong side of the line. Making a false declaration to HMRC in your annual return and then being audited will likely lead to a full audit going back 6-7 years with all tax being due, interest charges, and penalties (fines).

Who advised you to simply claim the entire cost of the lease of your car as an expense, irrespective of the actual business mileage ?

In terms of expenses and mortgage applications, most lenders will not recognise expenses as they represent (of course) reimbursement for a cost incurred - not as an income.

Is that what he's doing though? My interpretation was that he was doing a relatively high business mileage and, rather than have a company car or car allowance, he was just claiming mileage at the prevailing rate for a private car (45p for the first 10k miles, 25p thereafter) and that was covering his monthly finance repayment? However, if he's doing as you suggest - and claiming the monthly finance cost regardless of mileage travelled - I agree he (and his company) are straying the wrong side of the line!

From this text "and claim back my mileage to cover the payment every month" it doesn't sound like the claims are mileage-dependent.

moonshine · 08-22-2016, 04:48 AM

if you assume fuel costs 15p per mile.
one "makes" 30p per mile for the first 10000miles (assuming 45p per mile), dropping to 10p per mile thereafter.

£600 per month "milage claim" is £7200 annually.
£3000 can come from claiming the first 10,000 miles at 30p profit, the remaining £4200 has to be gained from a1 0p per mile "profit" which is 42000 miles.

are you really doing 52000 miles a year (1000 a week / 4000 a month) in your own car for work?

08-21-2016, 04:45 PM	#1
M40CCA Colonel 1437 Rep 2,666 Posts Drives: BMW 335xdrive LCI msport Join Date: Apr 2016 Location: Leeds iTrader: (0)	What can I do? Any help appreciated I think I am going to have to sell my 335d because of the mortgage I am having to get My situation is this My wife is pregnant with our 2nd child and I have 2 girls that stay with me on a weekend. At the moment we are in a 3 bedroom house so need to move I run my car as my own personal one through my family business and claim back my mileage to cover the payment every month, which gets paid back to me as expenses on my wage slip, so one I don't get taxed on the payments as I would if it was a car allowance and also it would put my annual salary into the 40% tax bracket Now when I have gone to the bank to borrow more for the bigger house they have said that because my car is paid as a expense they cannot take it as part of my wage because if I was off sick or not at work the mileage would not be claimed therefore the car payment would not be covered. This would never be the case because of it been my fathers business the car payment would always be covered no matter what but trying to explain this to the bank wouldn't stick The bank have said without the car payment which is £598/mth I could borrow easily enough to cover what I need I really don't want to sell the car but my family has to come first So unless someone knows of a way round this it's going to have to be done Would a BMW garage buy the car from me for cash? If I were to sell privately would the finance have to be settled first or can it be done there with the new buyer at the bank? __________________ 335d xdrive 2016 M-Sport 745Le xdrive 2020 M-Sport
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08-21-2016, 04:52 PM	#2
on_the_virge Lieutenant 286 Rep 506 Posts Drives: Ex M140i.....to be replaced Join Date: Apr 2016 Location: Sheffield iTrader: (0)	i sold a car with Finance on it and got the buyer to settle the outstanding amount to the finance co and pay me the balance but I am not sure if all finance cos allow this otherwise it will be a case of settling this prior to sale and repaying with the proceeds. Can't you for the sake of the mortgage put the car as car allowance and then swap back after???
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08-21-2016, 04:53 PM	#3
badgerbrock72 Captain 111 Rep 624 Posts Drives: 340i M-Sport Join Date: Aug 2012 Location: Birmingham iTrader: (1)	shot in the dark, but are you applying for the mortgage in your name only (and therefore only taking into account your salary?) if so, could you transfer the car finance into your wife's name..... then wait a while till it drops off your credit file, and then apply for the mortgage? might be talking bolox but anything is worth a try? feel for you mate Garry __________________
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08-21-2016, 05:04 PM	#9
E60MKF Captain 94 Rep 715 Posts Drives: BMW F10 MY2013 Join Date: May 2013 Location: UK iTrader: (0)	Seeing as your wife is only pregnant right now, do you need a house now? Surely, for the first few months to 12 months, the new arrival will stay in your room so you can take time over the decision as to what to do with the car and picking the house too __________________ BMW E60 MY2008 (LCI) 2007-2013 BMW F10 MY2013 2013-2017 BMW F20 MY2013 2013-2016 BMW F30 MY2014 2014-2015
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08-21-2016, 06:31 PM	#12
mpawood First Lieutenant 131 Rep 395 Posts Drives: F36 435d xDrive M Sport Join Date: Jan 2016 Location: West Midlands iTrader: (0)	I'm confused as to how you claim back mileage to cover the cost of the car payment? Do you claim £600 regardless of miles done? Or are you saying the mileage you do is enough so that difference in cost of fuel and 45p is enough to cover car payment? I'm sure it can't be the latter as that's well over 10k miles a year. If it is indeed the former then you've shot yourself in the foot in order to evade tax?
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08-22-2016, 03:12 AM	#14
MashinBenzin Major General 8455 Rep 8,783 Posts Drives: Eiger D5 Join Date: Feb 2010 Location: UK iTrader: (0)	Give this guy a shout, he is fantastic on mortgages and the best lender for your individual circumstances. If it can be done, Liam will know how to do it... http://www.lt-mortgages.com/ I've used him, and he comes highly recommended by loads of people over on pistonheads (which is how I found out about him). ETA: He is very quick, so you'll probably have an inidicative answer with his opinion in minutes or very few hours __________________ Drives - 2020 LR Discovery HSE-L Previous - 2019 LR Discovery HSE-L // 2016 F36 440i // 2009 E90 320D SE
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08-22-2016, 03:46 AM	#16
MashinBenzin Major General 8455 Rep 8,783 Posts Drives: Eiger D5 Join Date: Feb 2010 Location: UK iTrader: (0)	Don't feel the time pressure too much and don't reveal all to your estate agent/buyer. You've accepted an offer, but that will only become legally binding once you exchange contracts - which is probably months away. Take your time, talk to Liam (or another independent mortgage advisor if you have a recommendation), consider your circumstances from all angles before making any rushed decisions on anything car or house related __________________ Drives - 2020 LR Discovery HSE-L Previous - 2019 LR Discovery HSE-L // 2016 F36 440i // 2009 E90 320D SE
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08-22-2016, 03:55 AM	#17
Watsey Major General 6416 Rep 8,498 Posts Drives: F31 330D sDrive M Sport Join Date: Jun 2015 Location: On sabbatical. iTrader: (1)	Fundamentally there are three ways to provide or help to fund a vehicle for an employee : 1. Fully funded company car : the company pays for all vehicle running costs, including the lease and fuel, and the employee pays BIK tax. 2. Partially funded company car : same as above, but no 'free' fuel. 3. Car allowance : employee is provided with a car allowance and provides the vehicle - employee then claims business mileage expenses from the employer based upon actual mileage. The car allowance is classed as income, just like salary, and is taxed as such. The mileage rate doesn't have to be HMRC mileage compliant, but any mileage (pence per mile, based upon engine size and fuel) will be taxable. HMRC compliant mileage claims are not taxed, although the compliant mileage rates are reduced when annual mileage exceeds 10,000 miles. If you are claiming the lease cost each month, irrespective of mileage, and classing the payments as expenses rather than income then you and your employer are on the wrong side of the line. Making a false declaration to HMRC in your annual return and then being audited will likely lead to a full audit going back 6-7 years with all tax being due, interest charges, and penalties (fines). Who advised you to simply claim the entire cost of the lease of your car as an expense, irrespective of the actual business mileage ? In terms of expenses and mortgage applications, most lenders will not recognise expenses as they represent (of course) reimbursement for a cost incurred - not as an income. __________________ Current : F31 330sD, remapped, Ohlins Road & Track, Millway camber plates, Quaife LSD, Stoptech brakes + Pagid RSL1 pads all round, Weichers front strut brace, Eibach front & rear anti-roll bars, Michelin MP4S.
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08-22-2016, 04:48 AM	#22
moonshine Lieutenant Colonel 849 Rep 1,858 Posts Drives: 718 Boxster S Join Date: Mar 2012 Location: Glasgow iTrader: (0)	if you assume fuel costs 15p per mile. one "makes" 30p per mile for the first 10000miles (assuming 45p per mile), dropping to 10p per mile thereafter. £600 per month "milage claim" is £7200 annually. £3000 can come from claiming the first 10,000 miles at 30p profit, the remaining £4200 has to be gained from a1 0p per mile "profit" which is 42000 miles. are you really doing 52000 miles a year (1000 a week / 4000 a month) in your own car for work?
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