Guaranteed cash compensation + car/travel allowance

[Chucklehead]

I'm looking at a new job offer at the moment which has the usual guaranteed cash compensation of £Xk (base + £Yk travel/car allowance paid in cash monthly).

I'm unfamiliar with the concept of a travel or cash allowance... And paid in cash?!

Have I misunderstood the offer? In terms of tax, what does this mean?

[98elise]

Is treated as pay for tax purposes. The tax man doesn't car what your employer calls it.

[bogie]

the downside of a car allowance is that you may get inflationary pay rises on salary, but allowance might stay fixed for years ...I know mine did

often you are just better off having £5K or £10K added to salary in lieu of car "allowance"

you also get company pension contributions on salary...you dont on your car allowance

otherwise you just pay tax/NI on any car allowance as normal part of pay

[ChasW]

I had a car allowance in a previous role and during a tough period for the business when pay was frozen I negotiated to have it converted to salary. On the surface it looks as though it makes no difference but in reality it's an small increase in employer pension contribution and bumps up things like life assurance pay outs.

[Chucklehead]

Thanks folks, you answered my follow up questions too!