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If a job offer says you are entitled to a car or car allowance of say £600 a month, what does this mean?
I dont have a car as the wife has a company car so we just use that. I assume I wouldn't be able to claim the allowance, but I also don't have anywhere to park another car and the nature of the job would be that an occasional hire car would be sufficient rather than a full time company car.
I do have a motorbike though, I'd be happy to use this in summer, but not in winter so I guess thats out.
Can someone explain in small words what exactly it means and what I can and can't do?!?
Unfortunately a lot of companies do things in different ways. If my company offer me a car allowance then it is just put on my salary and taxed as though it was part of my salary.
It is often used as a perk on top of a salary to lure people in.
It means that you can either opt for a company car provided by the company (and you'll pay tax on it) or you can have £600/month added to your salary (which will be taxed as normal salary).
If you don't need a car for your job (eg my situation) so it's just part of your benefits package, you don't actually have to buy a car. If however, you do need a car for your job then there's usually a minimum requirement (eg less than 3 years old, 4 seats, etc).
How about ringing them up and asking? Job offers are quite important things.
Car allowance is just an extra chunk of salary, which is subject to tax and NI, however is not counted in terms of pensionable salary, or as a percentage of salary for bonus purposes etc. However, mortgage companies do consider this as salary in terms of total income.
As for the rules around needing a vehicle, that will depend on the contract of employment and would be worth checking.
And some employers demand you have a car, while others don't - either way, just treat it as cash.
You should also (if you do any business miles) be able to claim for these as well - and £600pcm is a good allowance, you must be reasonably senior?
You should also (if you do any business miles) be able to claim for these as well
Make sure your insurance covers you for business mileage if so!
The opt out detail will depend on the your policy.
My Mrs can take the car allowance money and do whatever she wants with it. In theory she could not own one, just hire when needed, but pay for it herself out of the allowance.
My policy, despite being a 'perk', has stipulations and restrictions on what I can own (seats, doors, CO2 emissions and MPG) and I have to provide HR with V5, insurance documents, MOT to prove I own a car that meets the requirements.
You need to check direct on your circumstance.
[i]My policy, despite being a 'perk', has stipulations and restrictions on what I can own (seats, doors, CO2 emissions and MPG) and I have to provide HR with V5, insurance documents, MOT to prove I own a car that meets the requirements.[/i]
What you need is a Director who's a petrol-head, don't get that co2 nonsense then 🙂
If you do all the sums extrapolated over 3 or 4 years, taking the money and buying a car usually comes out best, albeit usually with a lesser car.
However, some people are happier with the co car as it takes away any financial responsibility should you suddenly find yourself out of work.
There's a couple of guys who I work with have just splashed out on new cars and are now being made redundant, they should be OK if they get another job soon and they actually want a car but if not, they're left with selling it on etc.
Some people are just more comfortable with taking the co car and paying the bit extra.
ah, thanks for the advice guys.
Not contacted the company yet as I'm awaiting the offer to come through (ive been told its on the way), but their standard terms for that grade include an allowance.
Oh, I used £600 as an example, the actual allowance is £493 PCM, how does that compare?
(its the first position i'll have with the allowance so dont know anything about them!)
I'll certainly check the conditions, as my only other vehicle is a 1996 VW transporter with a camper conversion, not exactly the most suitable work vehicle although bacon butties and tea followed by a nap while on site / after meetings may be an option!
Some places just use "car allowance" as a way of topping up a salary without screwing with things like payscales and bandings. A mate gets it, despite working and living in London, cycling everywhere, and not having a driving licence.
Typically though, it's associated with jobs that involve some degree of driving for work. And in that case, you're expected to use that money to provide a car for yourself that meets some requirements. These vary quite a bit but there's normally an age restriction (so no old sheds), and with corporate manslaughter laws taking effect HR departments are a lot more interested in ensuring that the cars employees use for their work are safe. We have to provide evidence of cars being serviced according to manufacturer's spec, MOT (if needed), insurance including business use, etc.
If your job really doesn't need a car beyond occasional use, you could propose that you just hire as you need (paid by you out of your allowance).
I'm liking the idea of just paying to hire one myself as required, didn't think of this.
It was worth asking afterall!
cheers fellas. 😀
£493 PCM is pretty good... If I opted out I think I'd get about £380ish...
I get a company car - and the reason I've stayedv in the scheme is I do a lot of miles (20k personal + 5k work)as we use my car as the principle family runabout at weekends, I feel its a better deal to have the lease company pay for my tyres/servicing/insurance.
If I did a lot less miles I'd ditch the company car and take the allowance.
£493 PCM is pretty good... If I opted out I think I'd get about £380ish...
If you don't mind me asking, what type of car do you get for that rough value?
As vague as Polo / Golf / Passat / Phaeton(!) sized is fine!