jaytc2003

iTrader: (1)

Got a job interview next Friday, and part of the package is a car allowance. Is this generally a % of the annual wage or some other figure?

Obviously I will ask the question next week if appropriate but just wondering if there is some standard type of rule

Anyone know what the average is for the uk?

cheers

J4CKO

iTrader: (1)

I get £440 plus £90 fuel, so £510, would pay for something interesting, if I ever had to drive anywhere.

jaytc2003

iTrader: (1)

is that after tax?

hodgy0_2

Yep in my experience it is somewhere between £400 and £600 a month

But at the upper end they may stipulate you drive a certain type of car I.e 4 doors and less than 4 years old etc

( this happened to me - and I negotiated a slightly lower car allowance but an increase in salary)

Always take salary over car allowance btw

jaytc2003

iTrader: (1)

cheers hodgy, I assume that is before tax? My wife has a 4yr old car (she has just got a co car) so I could use that and save the rest to get something more potent!

Is the allowance though generally a % of the annual in you experience?

dnc

Yes, in my previous job I chose an allowance over a car - £500/month. Current job has package including car and tax is a bit of a blow tbh, especially as I don't do high personal mileage and I don't want rid of my own car.

I am thinking of trying to negotiate as I am just in a lease hire car for first 6 months. Any tips in this Hodgy?

zip106

It's not normally a %age of salary, and quite often negotiable.
My Mrs negotiated hers to over £800 per month, but obviously tax hits it.

hodgy0_2

No forget %, historically car allowance was a tax dodge, a way of increasing your salary in a tax efficient manner

But subsequent rules changes have negated any tax advantage - and allowance simply get taxed like your salary

So always go for salary, why

Because redundancy payments are based on salary, sick/holiday pay is based on salary, pensions are based on salary, when you go for a new job they will generally ask what salary you have, when apply for a mortgage/loan they will ask for your salary

Often the car allowance is "discretionary" your salary is not

And in my personal view always take the money, never the car

zip106

That all depends how good (or bad) your salary is.

For some, £5-6k 'given' as car allowance instead of salary would make bugger all difference to getting a mortgage/loan/redundancy.

In fact it's a great bargaining tool going forward to a new job and showing them what package your previous employers gave you.

andy97

iTrader: (1)

Years ago my wife got the option to have company car or salary+ mileage allowance, we chose salary + mileage. The deal was so good that it allowed us to get the subaru serviced main dealer and make a bonus on the fuel allowance to buy another car

From memory I think the salary boost was about £5k extra/year

PaulC72

I have my allowance wrapped up in salary, salary is the winner every time, some companies have allowances on bandings depending on 'how' important you are....

I had one job once which paid the allowance on its own plus 10000 miles in fuel at 40p so even if I didn't go anywhere that month I could still claim the 833 miles of driving as it was my allowance..

hodgy0_2

My only tip is to make sure you get on with your manager - or the person who has the power to amend your contract

pimmo2000

iTrader: (6)

Completely agree, the only time to take a car allowance is when an increase in wage isn't an option.

jaytc2003

iTrader: (1)

so to throw a curve ball, what about if I could get a co car instead?

Graz

I get £6k a year before tax. It is nothing more than a perk as I average 0 business miles a year. We do have the option of a car as well but it's no cheap and you get to drive a low spec BMW for three years (e.g. 320d) albeit trouble free i.e. servicing, tyres, tax are all paid for.

I'd rather spend it on something used but a bit nicer which is what I've done

dazdavies

iTrader: (22)

I had an interview last week with a firm offering a £5K per year car allowance. I got the job I informed them I had an issue as I'm unwilling to finance a new car and that would be a sticking point.
The best thing is they are happy for me to use my 12 year old Golf and pay me 45p per mile for any business mileage. I'll be out of the office for a day or two a week max.

Happy Days.

Tidgy

I went company car route goa fiesta tdci and fuel card if its a second car then company car works out better in themaths i did, but that was comparing an M3 fuel and running costs lol

Littleted

Tidgy did it right, get anything fancy and youll get Bummed.
We did some fancy excel sheet once, best mid range cars were the BMW dynamic ones and some Renaults.

personally stick with your own and just have the cash pay towards something for you or the wife.

Mate at works gets bent over for 800 for a 520D with lots of trimmings, far too much

I only pay 500 for the A45....

Devildog

Jay

There's a lot of **** being spouted on this thread (as is becoming the Scoobynet norm)

Car allowances are ofen negotiable and vary from employer to employer. It is what it is subject to being negotiated.

You may be offered the choice between a compay car or monthly allowance or higher salary. What is best in that circumstance will depend on many things, such as:

The taxible benefit of the car
The amount of the allowance
Whether you pay tax at higher rate or not
Your employers pension arrangements (car allowance is not taken into account when calculating employer's contribution as a percentage of salary)
NIC contributions are not (per recent case law) payable on the car allowance
and so on

To simply say you should always take salary over car allowance or a company car is not always correct, and will depend on individual circumastances.

Employers may often use a "car allowance" as a way to keep salary and hence NI payments and pension contributions lower, but not always. As a result, you may be better off taking the car allowance than the higher salary option, but ask if the allowance will also be reviewed in line with salary increases.

I'm not aware that a car allowance was ever a tax dodge as its subject to PAYE in the same way salary is, and until recently NIC also. The biggest tax avoidance measure with company cars in recent years was to get a pick up on the flat rate £500 a year benfit in kind.

Benefit in kind tax on a company car (particularly if you are on a lower tax rate) can often be less expensive than financing and running a car yourself (depending of course on value and Co2)

My old fully insured, servcied, and maintained Scoob would have cost me significantly more than the tax hit, had I bought it myself.

Often salary rather than allowance is not an option.

It depends on the individual circumstance.

hodgy0_2

so are salaries!!!!


amazing insight

Scooby-Mark

Company car tax has changed a lot over the last few years, My last company car was 3 years ago and was a SEAT Leon Cupra K1 which cost me if I remember right £300ish a month in tax (Without digging out old payslips I couldn't be sure)
But I got all my insurance, Road tax, maintenance etc ..and most of my fuel paid (Fuel card and contributed some personal miles deducted in pay packet each month as cheaper than a fully paid company car on personal tax)

Couldn't of run the same car out of my own pocket for that much a month and as a car enthusiast it suited me

But then it doesn't suit everyone as some moaned that even £1200 per year was a lot for a car they didn't want as they were happy driving round in an old car unfinanced and cost them £300-400 per year in insurance, plus £150 in road tax.

It also depends a lot on how much you earn as to the tax you pay on it i.e if you go into the 40% tax bracket and also now on the Co2 emissions of the car.

A lad who worked for me had a 1 series BMW for just over £100 per month, and there were some even cheaper, I believe purchase price has an effect on the P11D value too.

You can work out what each car costs on here

www.whatcar.com/company-car-tax/

One thing it is worth ensuring they get the figures correct on your P11D at the end of each year or you could cop another tax bill later

So like everything it personal choice, if the salary is good and won't effect getting mortgages and the like and you get a nice motor for a few hundred quid a month its a decent deal but not for everyone.

One thing I would say to bear in mind from experience is insurance !!!
usually after about two years your NC bonus expires.
I found this out when I quit the job after 26 months and came to get my own insurance again, lost 11 years and only had the letter stating two clean years from the company insurance

Good excuse to keep a Scoob as a second car though

Tidgy

for me tax will bearound £500-£700 per year depending on which version of the focus, its all the same 1.6 tdci but spec change makes price change so puts it up. Also get fuel card for it and to work and back is considered work mile, so combine that with no road tax, running costs etc works out half of what i soend now, let alone buying and maintaining a car.

I've kept the m3 for the weekends