You don't need to be an 'investor' to invest in Singletrack: 6 days left: 95% of target - Find out more
Up till now we've always had fleet cars off an approved list / up to a particular per month value from the lease company. I'm now looking at a potential new job that has a car allowance - up to so much per month but its more up to you how to spend it. How does that work then? Do I get to keep any excess if for example I choose to have a cheaper / older car as opposed to using the limit? And how does the tax work?
If it's like where I worked then you pay Tax/NI at the normal rate on your allowance and then it's up to you what you spend it on and how much you decide to spend.
Yeah as above. Taxed as though it was part of your salary. Anything you don't spend you get to keep, or at least I do. There's no requirement for me to use it all on a car.
If you get a car allowance, you also get tax relief on your business mileage. Say you get paid 15p per mile, you get tax relief on the remainder up to 45p per mile (first 10,000 miles, then a lower rate after that). Can give you a nice little annual rebate. I think it's HMRC form P87.
Most companies that offer this place some conditions around the age of the car. IIRC my mate was allowed a car up to five years old. He ended up leasing a one year old Saab which was a fair bit cheaper than a brand new one.
Allowance is taxable.
Policies can vary a lot so you need to check the terms with your new HR.
I must meet a certain spec - mpg, emissions, safety rating, 4 doors, less than a certain age.
My Mrs doesn't even have to have her own car as long as one is available for business so could walk to work and hire a car if needed.
Where do you get your cars from? Personal contract plans, HP agreements with the local dealers, etc? Are you free to choose as if it was your own car (which I guess it is)
I've been on a car allowance for the past 12 years, way better than a fleet car, means I get what I want when I want without any rules on particular brands (I stuck to one that's not normally on the fleet books) My view is that I'd have to have a car anyway so the allowance allows me to choose something a bit better that will mean I wont crawl out of it crippled after a long days driving.
Allowance is just cash, but you'd also expect the full 45ppm (first 10k) etc for business miles. Aim to spend as little as possible 🙂
And remember, any finance you enter into is your problem (you could be like my friend, two leased BMW's at £900pcm and made redundant...).
I just get money. Might as well be some extra wage.
Just extra money, non pensionable. I drive what the hell I want.