Fixed sum allowance?

Bennite · 16 July 2018 at 5:43PM

Hi folks. Apologies in advance if this is in the wrong forum - I had a browse and it seemed like the best place.

I have recently been shortlisted for a job which, in addition to the salary, offers 1) 'fixed sum allowance' and 2) 'car allowance'

1. Fixed sum allowance
As best as I can tell this term doesn't seem to be widely used by HMRC anymore. Is this kind of payment taxable? Is it something I receive (as the name suggests) as a fixed sum regardless of any other factors?

2. Car allowance
Likewise - is this a taxable form of income? Additionally, if this income is specifically stated as a car allowance, must I demonstrate that it has been spent on a car (or equivalent work related travel), or am I free to spend it how I like?

Many thanks!

00ec25 · 16 July 2018 at 6:18PM

1. we can't read your employment contract from here so we have no idea what , if any, conditions control when you will, or will not, be paid a fixed sum

I would be amazed if it was not taxable in full otherwise it would be called something different eg, student bursary/ scholarship fund. I doubt you are a student so just assume it is taxable until you read your contract and find out what it is

2. subject to whatever conditions are set out in your employment contract a "car" allowance is taxed the same as though it were simply extra salary

a typical difference with a car allowance is it may not count towards your pensionable income when working out how much pension deductions you have to pay, and more importantly, how much pension deductions the employer has to pay

Fixed sum allowance?

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