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Skidd

Car Allowance

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The business I'm working for is going through an M&A, and I'm joining a larger company on Dec 1st.  Just negotiating terms at the moment, and they're offering as standard, an 8K PA car allowance to my job level.  I don't have a car allowance at present.

Now, I'm yet to receive the T&Cs of this, but from past experience (other job offers I've had), there is usually a stipulation that the car you use is under 3, or 5 yrs old.  My 987 (that I have no intention of changing at this point) is 12yrs old.

I don't need another car, so was going to take the allowance as cash. Has anyone been through this - and what did you do?  Did you 'upgrade' to a newer car, or take another route?

Edited by Skidd

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Take the cash mate. Will you still get mileage on top 

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10 minutes ago, fat haggis said:

Take the cash mate. Will you still get mileage on top 

Yes, I was going to, but presumably, you need to have a qualifying car to take the cash - which I may not....

 

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Bear in mind that you will be taxed on that as part of your salary, could put you in a higher tax bracket?

Might be better to ask to run your Boxster and claim back as p/mile at the HMRC rates?

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8 minutes ago, Pezky said:

Bear in mind that you will be taxed on that as part of your salary, could put you in a higher tax bracket?

Might be better to ask to run your Boxster and claim back as p/mile at the HMRC rates?

It wouldn't put me in a higher bracket - even if it did - 50%+NI of 8K is better than 0% of 8K.

I need to find out if it's acceptable to use my existing car and take it from there.  My concern is to get it, I'd need a qualifying car.  If I do, perhaps man-maths can kick in and justify some new pork :).

Edited by Skidd

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Do you use your car for much business mileage? Do you take clients in it or visit client premises? Just wondering whether they might be happy to make an exception for a well kept Porsche?

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Fwiw my experience is your car would not entitle you to the allowance. The normal way around this is to try to simply negotiate it onto your salary but that may cause other internal issues for them. The other bonus is you would not get the reduced mileage rate that you would with a car allowance. Sometimes less on your salary but full mileage allowance is worth more in your pocket. Everyone's circumstances are different though. 

First world problems though as worst case is your same as you are now. 

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make sure it has business use insurance and dont make any fuss over it would be my advice - the new thing will be different and you can decide on something like this in the future if you like the new world. No point in changing something for the sake of it. I had the same situation for nearly 5 years and it came up a couple of times but nothing came of it and I used a 8 year old Saab, 15 year old TVR and 35 year old Triumph Stag for business use!

It is worth remembering that benefits like this are generally cheaper for the employer than the same level of basic pay - pensions contributions are based on basic pay for instance and any business travel policies can be different meaning that you might have travel to their other offices capped to mileage policy or something similar.

Good luck with the change!

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Lots of good advice, thanks.  I guess it comes down to how strictly T&Cs are enforced.  I've heard stories of people having to submit V5, MOT and insurance documentation to maintain the benefit - until I have line of site of that process, I won't know what the options are.  I'm always up for keeping my head down and keeping quiet on such matters if I can get away with it...within the context of performing at a high standard of course.

We shall see.... :unsure:

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Check the fine print.

One of my clients insisted that -- for people taking cash allowance -- a Board director sign off on the type of car they bought with it.

Questionable legally, but you don't really want to get into a bun fight with a new owner

Edited by guest1

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1 minute ago, guest1 said:

Check the fine print.

One of my clients insisted that -- for people taking cash allowance -- a Board director sign off on the type of car they bought with it.

Questionable legally, but you don't really want to get into a bun fight with a new owner

Agreed, though I'm sure policies vary hugely - I know the company I am with essentially don't have a policy other than it much be taxed, insured, MOT'ed etc and if you can't drive it for whatever reason then it's your responsibility to sort out a hire car or whatever.

I chose on my last renewal a year ago to stick with a company lease vehicle (though I had reasonably free reign with this as long as I kept within the rough cost band of the last car) - next time I think I will probably go my own way and take the allowance...

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The best approach in these situations is usually to make a decision that's best for you and keep your head down, don't discuss with co-workers.

Plead for forgiveness if it goes pear shaped.

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Turns out there is no qualifiying criteria so I'm all good.  Apparently there are people joining who don't even have driving licenses but get an allowance - the existence of a car is completely immaterial.

Happy days.  Looks like I have my Boxster maintenance fund then.

Must be time to call Russ about those coolant crossover pipes.... ^_^

Edited by Skidd

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32 minutes ago, Skidd said:

Turns out there is no qualifiying criteria so I'm all good.  Apparently there are people joining who don't even have driving licenses but get an allowance - the existence of a car is completely immaterial.

Happy days.  Looks like I have my Boxster maintenance fund then.

Must be time to call Russ about those coolant crossover pipes.... ^_^

Great news, that will make a chunky maintenance fund with plenty left over for some tasteful upgrades🙂

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