Job offer, negotiations and Car Allowance

[Lostprophet]

Hi Folks,

I have been an offer by a company. It's slightly less than I expected in net pay however they have offered £6k car allowance which makes it a reasonable offer. I am not up to speed, no pun intended, on how car allowance is taxed. Could any one provide some insight please? i'm a higher rate tax payer.

The consultant managing the negotiations is reluctant to push the base any higher as he says the package in total is really good. He said it might put a bitter taste in the mouth of the employers.

Any advice would be welcomed.

Thanks,
LP

[GT03ROB]

Treat the car allowance as salary. It's used by most companies in that way but it's then usually not pensionable.

[mfmman]

A company car allowance is subject to Income tax and NI in the same way as any other part of salary. It can also affect Child Benefit as well.

It usually doesn't count for pension contributions etc though (but that's a contractual thing)

However, you may be able to claim a tax rebate for business mileage depending on how much your employer pays per mile for business use

[Sheepshanks]

Lostprophet said:

I am not up to speed, no pun intended, on how car allowance is taxed. Could any one provide some insight please? i'm a higher rate tax payer.

Same as salary, for both tax and NI.

It doesn't count towards salary for pension etc. There's always the possibility that the allowance could be changed or even done away with.

[fat80b]

Lostprophet said:

The consultant managing the negotiations is reluctant to push the base any higher as he says the package in total is really good. He said it might put a bitter taste in the mouth of the employers.

Depends what the role is I suppose but I don't think I agree with the "consultant" - they won't be bitter - it's a negotiation and the worst they can say is no.

I would sit down and think what matters to you - If you need a few K more base then ask for it.

The best time to negotiate a pay rise is on the way in - it's much harder once you are there.

Bob

[Slurms]

fat80b said:

Lostprophet said:

The consultant managing the negotiations is reluctant to push the base any higher as he says the package in total is really good. He said it might put a bitter taste in the mouth of the employers.

Depends what the role is I suppose but I don't think I agree with the "consultant" - they won't be bitter - it's a negotiation and the worst they can say is no.

I would sit down and think what matters to you - If you need a few K more base then ask for it.

The best time to negotiate a pay rise is on the way in - it's much harder once you are there.

Bob

This ^^

The consultant is just trying to close the deal, if you ask for more money and they do say no you might not accept the job and they won't get their commission.

Ask, i've done it more than once, all they can do is say no and TBH unless it's a massive increase it shouldn't be a problem unless budgets are really tight.