Car Allowance - Used as extra income?

edited 5 September 2019 at 1:16PM in Boost your income
4 replies 939 views
stefstef91stefstef91 Forumite
1 Post
edited 5 September 2019 at 1:16PM in Boost your income
Hi guys,

So this is probably a stupid question but I've never had a car allowance and do not know how it works,

So i'm transferring jobs to a new office back in the UK (currently abroad) and i've given them my salary expectations. The amount I've asked for is essentially my current salary plus the other benefits I get where i'm working now (free food vouchers, trasnport paid, gov bonus on top)

My new employer has never confirmed the final figure but just said that that amount is doable.

I spoke to them recently and they said they'll send over the contract with the new salary. He then said they will offer a car allowance which will probably cover all the additional benefits I used to get in my current country.

SO, essentially i'm just wondering why they would do this? Is it worth doing it this way or do I stick to my guns and ask for the original amount I requested? It is a lump sum added to the salary or do you have to prove you purchased a car?

My job doesn't involve me using a car and I wouldn't be using one for commuting. It sounded like it was just a perk that would essentially give me the annual salary I was asking for.

Any one who's been in this situation or can just explain a bit more what a car allowance is would be greatly appreciated.

Thanks in advance,



  • Whenever I've had jobs with car allowance I haven't received it because I don't drive and I needed to hand over car details, insurance documents etc to obtain it.
  • k3lvck3lvc Forumite
    4.2K Posts
    Part of the Furniture 1,000 Posts Name Dropper
    Likewise my contract states that in return for the car allowance I must provide a min 4 seat/4 door car less than 7yrs old and in condition aligned with company values. This was clarified after an ex colleague paid £50 for a short MOT Astra and left it in company car park to rot having pocketed his £9k pa allowance :rotfl:
  • moleratmolerat Forumite
    29.1K Posts
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Car allowance is purely extra salary and is taxable as such. The requirement to actually have a car is a contractual arrangement so you will have to ask them.
  • jackomdjjackomdj Forumite
    3.1K Posts
    Part of the Furniture 1,000 Posts
    Companies tend to give a car allowance specifically so it doesn't form part of salary for bonus/pension/redundancy purposes. Also pay rises are also based on salary, while car allowances generally don't tend to rise as much.
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