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  • FIRST POST
    • thisisme2000
    • By thisisme2000 12th Feb 19, 11:42 AM
    • 16Posts
    • 10Thanks
    thisisme2000
    Car allowance
    • #1
    • 12th Feb 19, 11:42 AM
    Car allowance 12th Feb 19 at 11:42 AM
    Hi folks,

    Not sure if this is the right place.

    I am starting a new job with a salary of 35k + 5k car allowance.

    I've ran this through the salary calculator website and my take home pay is not clear to me - do I take the above as a salary of 40k or do I put the car allowance as a taxeable benefit. ?

    It seems I get less take home if it's a taxeable benefit ?

    Thanks in advance for your help
Page 1
    • somethingcorporate
    • By somethingcorporate 12th Feb 19, 11:43 AM
    • 9,119 Posts
    • 8,806 Thanks
    somethingcorporate
    • #2
    • 12th Feb 19, 11:43 AM
    • #2
    • 12th Feb 19, 11:43 AM
    It will be paid no different to salary so you should just include your salary as 40k.
    Thinking critically since 1996....
    • thisisme2000
    • By thisisme2000 12th Feb 19, 12:05 PM
    • 16 Posts
    • 10 Thanks
    thisisme2000
    • #3
    • 12th Feb 19, 12:05 PM
    • #3
    • 12th Feb 19, 12:05 PM
    Thanks that is the answer I was hoping for 😀
    • andydownes123
    • By andydownes123 12th Feb 19, 2:15 PM
    • 550 Posts
    • 668 Thanks
    andydownes123
    • #4
    • 12th Feb 19, 2:15 PM
    • #4
    • 12th Feb 19, 2:15 PM
    Yep it's classed as a benefit in kind, meaning instead of money. So it literally counts as cash in your pocket.
    • aries_163
    • By aries_163 12th Feb 19, 3:16 PM
    • 45 Posts
    • 23 Thanks
    aries_163
    • #5
    • 12th Feb 19, 3:16 PM
    • #5
    • 12th Feb 19, 3:16 PM
    Thanks for posting this! This is the exact same question as I have been trying to find out for a new job I will be starting soon!
    • JCS1
    • By JCS1 12th Feb 19, 4:33 PM
    • 3,860 Posts
    • 7,843 Thanks
    JCS1
    • #6
    • 12th Feb 19, 4:33 PM
    • #6
    • 12th Feb 19, 4:33 PM
    Yep it's classed as a benefit in kind, meaning instead of money. So it literally counts as cash in your pocket.
    Originally posted by andydownes123


    Car allowance paid through payroll is not a benefit in kind, as it's taxed and NI'd at source so not declarable on a P11D.
    • Dazed and confused
    • By Dazed and confused 12th Feb 19, 9:00 PM
    • 4,558 Posts
    • 2,347 Thanks
    Dazed and confused
    • #7
    • 12th Feb 19, 9:00 PM
    • #7
    • 12th Feb 19, 9:00 PM
    You should also check your company's policy regarding pension contributions.

    Previous posters on here with Car Allowance seem to find that the allowance isn't part of their pay as far as any company pension scheme is concerned.

    So you may pay tax (and NI) on 40k but only build up a pension based on 35k.
    • LawAbiding
    • By LawAbiding 12th Feb 19, 9:02 PM
    • 98 Posts
    • 33 Thanks
    LawAbiding
    • #8
    • 12th Feb 19, 9:02 PM
    • #8
    • 12th Feb 19, 9:02 PM
    Dazed and Confused is correct.

    Majority of employers who offer cash allowance instead of a company car, make the cash allowance payment as a separate line on your wage slip.

    This is so, no pension contributions is taken from it, only tax and NI
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