Car allowance - do I need to get a car?

[Horispondle]

I've been offered an promotion that includes a £5k car allowance. I don't have a car just now as fully wfh and sold it during the first lockdown as wasn't going anywhere. If I get paid a car allowance do I need to use it for a car? Will HRMC check? Don't want to be doing anything dodgy but seems madness to buy a car that will hardly be used!

I think you have to have a car available should your employer wish you to travel somewhere. For example it would be unreasonable for you to have a car allowance and then claim train expenses for a meeting an hour away. With my previous employers if you didn’t need a car every day, but were expected to have one if needed hiring a car for the day or paying your own travel expenses for meetings was acceptable.

I shouldn't think so.
I had that in a previous job, and there was no requirement to get a car!
You will still be taxed on it, so HMRC won't care.
I think companies frame it as a "car allowance" rather than a straightforward pay rise, because then it is non-pensionable.

The only reason I can see where it might matter is if you need to travel as part of your new job role, and you say that you can't because you don't have a car. But that would only be for specific jobs, and would have to be in your job description I would think. You may not be wfh forever, but as long as you get yourself to work as required, why would they care if you drive, walk, cycle, bus, or fly in by hot air balloon?

Check your contract to see if it explicitly states that you need to buy a car. If you're still unsure, ask! But I'm sure it will be fine.

And congratulations on the promotion!

Yep what @SquishySquirmy said! No need to buy a car unless it’s a requirement of the role. In my experience it’s a way to give a salary increase that doesn’t entail paying extra bonus or pension. It does however keen paying for the duration if you ever go on maternity leave which I found quite handy!

Like redtartanshoes says I don't think that you could demand they pay for you to get a taxi to a training course, or to a nearby meeting when they already pay for a car allowance. But as long as you get there on time I can't see how it's your employer's business how you travel.
When I didn't have a car, I lived within walking distance from work and would just pay for a taxi myself when needed. The occasional taxi still worked out a lot cheaper than owning and insuring a car!

Depends on company policy. But I've had car allowances for years with differing companies

No you don't have to buy a car with the money

You'll be taxed as part of paye so no need to tell the tax man

You will however have to have a car available, or cover your travelling expenses

But you should be able to claim back a pence per mile for fuel etc (unless you also get a fuel card). Your pence per mile will be lower than those who don't get a car allowance, because you get a car allowance, and that allowance not only covers you buy or lease a car, but also covers insurance, tax servicing etc which you will have to fund yourself

Don't forget your car will have to have business insurance included