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    • DD265
    • By DD265 16th Apr 18, 3:52 PM
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    DD265
    Company car allowance - age clause
    • #1
    • 16th Apr 18, 3:52 PM
    Company car allowance - age clause 16th Apr 18 at 3:52 PM
    I've worked for my employer for several years, and they have recently offered me a car allowance which I haven't had previously. However, a contractual element of this is that the car cannot be more than 6 years old - mine is about to turn 15. There is a statement that exceptions will be considered on a case by case basis.

    I go to see customers occasionally but IMO not enough to justify the car allowance. I think it was offered as a means of effectively increasing my basic salary, but my manager also acknowledged that I do a lot of driving as I don't live local to any of our offices.

    I am not in a position to change cars (and certainly not to one so young) nor do I see any reason to. My car is a very well maintained Golf that I purchased a year ago. I keep it clean inside and out, I get it serviced twice a year based on mileage, the economy/tax are reasonable (diesel) and it just passed it's MOT with flying colours. It also has a personalised number plate so at a glance you wouldn't know it's age.

    I don't know whether I should say anything and potentially even decline the car allowance? What would you do?
Page 2
    • Car 54
    • By Car 54 17th Apr 18, 9:23 AM
    • 2,913 Posts
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    Car 54
    You are correct, and I never said that he could.

    Laidback's point was that the employer was likely specifying a newer car on h&s grounds. To satisfy h&s requirements for company car allowance you only need to provide an MOT certificate. The age of the vehicle is irrelevant. Under every company car allowance scheme I've seen the employee is contractually obliged to maintain their vehicle and keep it roadworthy.
    Originally posted by fatrab
    Strange as it seems, not everyone fulfils their contractual obligations. Suppose the employee has a valid MOT, but four bald tyres. When he ploughs into a bus stop, scattering nuns and kittens in all directions, is the employer in the clear?
    • fatrab
    • By fatrab 17th Apr 18, 9:39 AM
    • 833 Posts
    • 1,849 Thanks
    fatrab
    Strange as it seems, not everyone fulfils their contractual obligations. Suppose the employee has a valid MOT, but four bald tyres. When he ploughs into a bus stop, scattering nuns and kittens in all directions, is the employer in the clear?
    Originally posted by Car 54
    Well in that event the employee would most likely be sacked and prosecuted I'd imagine.

    Every month when I submit my business mileage I need to tick a little box that says my car is roadworthy. Other than supplying an MOT certificate I've never been asked to provide any other verification that my car is roadworthy and I don't see what other steps an employer could reasonably take to ensure roadworthiness of an employees private car on business use. I think we're confusing a few separate issues here.

    Have you had company car allowance? If so, what were the rules at your company? I've worked for 3 large multi-national construction firms in the past 10 years and the policies were similar at each. I don't think they'd all be in breach of H&S regs.
    Last edited by fatrab; 17-04-2018 at 9:53 AM.
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    • IanMSpencer
    • By IanMSpencer 17th Apr 18, 5:18 PM
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    IanMSpencer
    As people have said, it is an health and safety issue - the employer is paying for the car so is acquiring a duty of care that the car it is allowing you is safe to drive. You will acquire other duties, like proving it is properly serviced, maintained and insured.

    Also, make sure that you are up to date on tax liabilities, there is a nasty catch relating to where there is a car allowance or company car option where you can end up paying tax on the higher of the two even if you chose the other option but it is so bizarre I've not got my head round it.
    • jimjames
    • By jimjames 17th Apr 18, 8:20 PM
    • 12,580 Posts
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    jimjames
    As people have said, it is an health and safety issue - the employer is paying for the car so is acquiring a duty of care that the car it is allowing you is safe to drive. You will acquire other duties, like proving it is properly serviced, maintained and insured.
    Originally posted by IanMSpencer
    But that is nothing to do with the age of the car. An older car can still have multiple airbags and ABS etc. Our car is paid by car allowance and is 16 years old, only requirement is that it must have 4 doors
    Remember the saying: if it looks too good to be true it almost certainly is.
    • Money_Grabber13579
    • By Money_Grabber13579 18th Apr 18, 1:07 AM
    • 2,876 Posts
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    Money_Grabber13579

    Also, make sure that you are up to date on tax liabilities, there is a nasty catch relating to where there is a car allowance or company car option where you can end up paying tax on the higher of the two even if you chose the other option but it is so bizarre I've not got my head round it.
    Originally posted by IanMSpencer
    Yep, think thatís part of a wider change to the benefit in kind rules for cars, where there is a salary sacrifice arrangement in place I.e. where an employee can choose to forego an amount of salary and instead receive another benefit, in this case, a car.

    In that case, the employee will either be taxed at 20%/40%/45% on the amount of cash they have given up as part of the salary sacrifice arrangement or the benefit in kind value of the car, which is the retail price multipled by a given percentage based on emissions, whichever is higher.

    Previously, the taxable amount was based on the benefit in kind value, but as emissions have dropped quite considerably, it was creating an incentive for employees to take out company cars again, which is against government policy and has been for a long time (to incentivise company car schemes)
    Northern Ireland club member No 382
    • DD265
    • By DD265 18th Apr 18, 11:56 AM
    • 1,306 Posts
    • 3,208 Thanks
    DD265
    I had a good chat with HR, they explained why they couldn't make an exception (not fair on everybody else) and I explained why I wasn't able to change cars right now. They do allow a grace period, and my age limit would actually have been 8 years, not the standard 6, but it still doesn't fit timing wise or financially. So no car allowance for me, and panic over. Thanks for all the advice.

    In terms of car maintenance/tax/insurance; I do all that anyway and would continue to do so car allowance or not, old or young car. I get irrationally annoyed at people who break down in the motorway roadworks where there's no hard shoulder so I do what I can to not be one of them!
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