If you get a monthly car allowance what do you actually spend it on?

[Eastie77]

I am starting a new role in a few weeks time. Same company I currently work for, differnt team).

I'll get a monthly car allowance that equates to roughly £8k a year.

I already have a car but won't need to use it in this new role. The job involves working onsite 3-4 times a week with my clients but they are mainly London based, as am I, and driving to their offices would be madness (traffic, congestion charge, no parking etc) so it only makes sense to take public transport.

Asked my manager about this and he said yes don't worry, you can spend the allowance on anything you want.

I'm wondering if I'm missing something as I believe in the old adage that you don't generally get something for nothing.

I understand it will be taxed at source at my personal rate and I will pay NI on it as well. I also assume it can be withdrawn at any time unlike e.g. a salary increase which I assume is the advantage in offering this as an allowance rather than as part of a pay rise. Is there anything else I need to be aware of..?

It is just another part of taxable pay. You pay tax and NI as usual.

It does not usually form part of pensionable pay, and pay rises will generally not routinely apply to this part.

You can spend it on what you like - it is your money.

Having said that, if I was paying it, I would kind of expect my employee to have a car available if required - and it not be a £500 banger.

I get similar. I spend it on normal stuff. It just makes up part of my salary. I do have to have a car available should I need to travel to another office - I would be allowed to hire a car and expense it.

I spend mine on food/coffee when on the road (services are a killer) and car ecpenses- repairs road tax etc.

All the expenses of being field based, basically.

It's called car allowance but just part of the cash you get paid each month unless you sacrifice it through a company scheme.

Ok thanks, that is clearer. I will use it for extra bits and bobs then. My car is suitable for client visits but not worth using even for the ones outside London. They are mainly on the M4 corridor and it would take me 1.5 hrs in the morning just to get from my side of London to west London to join the motorway. I don't think car use is ever mandatory. Two people in the new team told me they don't have a driving license.