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  • FIRST POST
    • josimar21
    • By josimar21 11th Jun 17, 3:30 PM
    • 4Posts
    • 1Thanks
    josimar21
    Advice needed - cash car allowance
    • #1
    • 11th Jun 17, 3:30 PM
    Advice needed - cash car allowance 11th Jun 17 at 3:30 PM
    Hi - I'm new to this forum but have a question about cash car allowance. I'm starting a new job in August and have been offered the following:

    £60,000 basic
    £5,833 cash car allowance
    11% employer pension contribution (5% from me)

    I'm trying to work out how much car allowance I'll take home monthly after tax...as I'm thinking of leasing a car. Question is - does the cash allowance get taxed in the same way as basic? Are there any other factors I need to consider?

    Thanks.
Page 1
    • Dazed and confused
    • By Dazed and confused 11th Jun 17, 3:45 PM
    • 1,989 Posts
    • 897 Thanks
    Dazed and confused
    • #2
    • 11th Jun 17, 3:45 PM
    • #2
    • 11th Jun 17, 3:45 PM
    Glass half empty
    Car allowance is just a way of giving you your salary without you being entitled to any pension on that part of your income (for most companies)

    Glass half full
    Car allowance gives you flexibility over and above being given a company car.

    On that basic salary you will pay 40% tax on all of the car allowance (plus national insurance but probably just 2% NI).

    That all assumes you aren't making significant private pension contributions and also doesn't take account any child benefit charge complications from that level of salary and company pension.
    • josimar21
    • By josimar21 11th Jun 17, 4:05 PM
    • 4 Posts
    • 1 Thanks
    josimar21
    • #3
    • 11th Jun 17, 4:05 PM
    • #3
    • 11th Jun 17, 4:05 PM
    OK, thanks. So I only get pension contribution on my basic but, apart from that, the car allowance gets dealt the same way as the basic in terms of tax.

    So to work out my monthly take home (for the car) I'm looking at 42% of £5833? Which by my reckoning is £2450. Then £5833 - £2450 = £3370. And £3370 / 12 = £280.
    • getmore4less
    • By getmore4less 11th Jun 17, 4:23 PM
    • 30,846 Posts
    • 18,450 Thanks
    getmore4less
    • #4
    • 11th Jun 17, 4:23 PM
    • #4
    • 11th Jun 17, 4:23 PM
    You also need to know the claimable expenses for the business miles.
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