Car allowance

84sjp

Hi all
I've asked my boss for a car allowance instead of a company car. He seems to think he can pay me this as an expense so as not to attract tax and NI. I'm 99.9% sure this is totally illegal as a car allowance is a taxable benefit. Also assume it would leave me liable should I be investigated.

Your thoughts please.
Thanks
Sam

Grumpy_chap

Car allowance is treated the same as additional salary from a tax point of view.  And NI.  Some companies exclude car allowance from pension contributions.
What car do you get now?  Is it fully expensed?  What allowance is the alternative?  How many miles do you do?

84sjp

Grumpy_chap said:

Car allowance is treated the same as additional salary from a tax point of view.  And NI.  Some companies exclude car allowance from pension contributions.high 
What car do you get now?  Is it fully expensed?  What allowance is the alternative?  How many miles do you do?

Hi
Just started the job so no car at the moment. The car I want (Hyundai SantaFe) has a high BIK rate and will cost me £250 month. Ultimately it works out better for me to take an allowance and PCP. I'll be covering 20k PA. 
Thanks
Sam

Grumpy_chap

OK - so what car would you get if you took the car?
What car allowance are you being offered?

I am not a fan of PCP, but very surprised you can get a £40k car at 20k annual mileage for £250/month.

EDIT:. Maybe the £250/month is the BIK tax payable?

84sjp

Grumpy_chap said:

OK - so what car would you get if you took the car?
What car allowance are you being offered?

I am not a fan of PCP, but very surprised you can get a £40k car at 20k annual mileage for £250/month.

EDIT:. Maybe the £250/month is the BIK tax payable?

That's the thing, I don't want a company car as the BIK is way too much on the car I want. 
£250 is what the BIK would be, not what the monthly payments are. And it's a two year old car for 18k which works out at £360 month.

Grumpy_chap

Does the company (employer) set any rules on type or age of car?
What monthly allowance will you be paid?
If you have the company car, what will it be?

unholyangel

I think we'd need actual figures (for bik, car allowance & current earnings). 

The one thing thats often overlooked is running costs. With a company car, the employer will be responsible for MOT, insurance, repairs etc. 

robkane1970

Hi everyone, my first post here! I was given a car allowance when i started my current job. there was no alternative to take a company car as clearly stated in my COE. Therefore does this "allowance" actually constitute part of my basic salary and thus would have to be taken into account for notice / holiday pay / furlough purposes?  If yes then I was not paid a % of the CA whilst I was furloughed so could I claim retrospectively?

Jeremy535897

What you were due to be paid while on furlough would be governed by your furlough agreement. Did it mention car allowance?