VW Passat: The perfect company car?

  • Tax burden for a 40% payer is £172 a month
  • Passat returning an average of 43mpg
  • Ideal choice for a company car driver

The Volkswagen Passat has been my friend for the past five months: it has never let me down, it has tolerated temper tantrums when stuck in traffic and it’s even told me when I need to slow down. It’s been as faithful as a pet dog.

It’s been faultless: it’s swallowed up four sets of golf clubs and still accommodated three golfing buddies with space to spare and, running at an average of 43.24mpg now, it’s been pleasingly frugal.

It’s great to drive too, and for someone with a 150-mile return commute each day, it’s been a fantastic cruiser. Comfortable, unflustered and refined, the Passat is ideal for anyone who regularly takes on long motorway journeys.

That means it is perfect as a company car. The addition of sat-nav, leather seats, rear parking sensors as well as fully integrated MP3 connectivity, it should tick all the boxes for a company car driver.

But what’s the financial burden if you decide to take on the VW Passat?

This particular version, which is the SE BlueMotion Tech 2.0-litre TDi 140PS six-speed, costs £23,600, but it does have a number of optional extras that push the price up quite considerably. The touchscreen multi-media system is £1,835, park assist £620, air-con upgrade £495, leather upgrade £1,735 and metallic paint £465.

That means a purchase price of £28,750 but you need to subtract £55 to get the P11d value of the car, which is key to working out what you’ll pay in company car tax. The P11d value for my car then is £28,695.

Then I need to work out which band the car falls into. Taking the CO2 emissions of 120g/km and you can see the car sits in the 18% benefit-in-kind threshold for the 2012/13 tax year.

So to find out how much tax you pay, simply take the P11d value and times by the percentage. In this case, that's £28,695 x 0.18 = £5,165.10

Now you multiply that number by the relevant amount of tax you have to pay. If you earn less than £37,000 you're on the basic rate of 20%. If you earn between £37,001 and £150,000 you're a higher rate payer and pay 40%. Anything above that and you're an additional rate payer and are in for 45%.

So, assume I'm a 20% tax payer, I'd take £5,165.10 x 0.2 = £1033.02

We now have the annual tax bill. To get monthly amounts simply divide by 12 which means £1033.02/12 is £86.09 per month in company car tax.

For a 40% tax payer the montly outgoing would be £172.17, which seems good value compared to a PCP deal we saw at broker4cars for a four-year deal paying £336.89 a month with a £2,108 deposit.

Current mileage: 23,594 miles

Average mpg: 43.24mpg