Car Allowance / Company Car

[audifan1985]

Hi,

I have a car allowance of £3,500p/a

Each month on my pay slip i have £290 car allowance but after tax this is a lot less. My company allows us to lease cars from the likes of nationwide leasing.

my question is & it might be stupid. Can i lease a car up to £290 or can i only lease cars to the value of that amount after tax?

[Troubleatmill]

Ask your employer.

Companies I worked for let you pay extra for the car you wanted ( as long as it met their criteria - e.g. 4 doors etc etc )

[sjg]

Car allowance is just considered extra pay for tax & NI purposes.

Some companies have leasing schemes set up for you to spend it on, else will usually stipulate some limits around what you're expected to run in order to keep getting your allowance (eg. under 5 years old, under x g/km CO2, etc).

[kambites]

My employer just treats it as extra pay. I can take it all as cash (which is what I do); spend some or all of it on a car; or spend more on a car and top it up from my salary. If I'm going to use it for a BiK company car, it has to be through one of the approved leasing schemes, though.

[S5V8]

That sounds very low £290 before tax. I assume they are refunding you at decent ppm like 45p rather than 12/14p??

[kambites]

S5V8 said:

That sounds very low £290 before tax. I assume they are refunding you at decent ppm like 45p rather than 12/14p??

In big companies, they're often tied to the cost of leasing a particular car. In the case of ours I think it's a poverty spec Vauxhall Insignia (which as it happens is almost identical to a base-spec 320d). I can't remember what mine is but I think it's that sort of order of magnitude.

In our case there's no possible justification for actually needing a car for business use, though. It's just an automatic pay-rise at a particular point in your career.