Do I want car allowance or extra salary?

[Bendi]

Some advice please - I've got my 1st interview for a F/T job since birth of DS on Friday, everything crossed, even the table legs.... (the interview is on Friday, not the birth ). They are offering salary & car allowance, but isn't the car element taxed at a higher rate? I seem to remember getting caught out years ago, but can't remember if that was for not paying enough tax on having a company car, rather than taking an allowance. Is there any difference at all? Any help (& crossed fingers) greatly appreciated

You have to work it out I am afraid. And you will have to work it out depending on each car. There are calculators available and your prospective employer will probably have one.

As a rough guide - company cars are taxed on CO2 emissions - therefore anything much larger than a Ford Fiesta is likely to cost you more than taking the cash.

DH has salary + car allowance and I always think it's a bit sneaky as his pension contributions and pay rise are based on his salary only. Don't know about the tax though, don't think it's any different.

Thanks Quattrocento - I don't think I phrased my question clearly enough - not a good start for a job where comms are important..!
Do I get taxed at a higher rate on the car allowance than the salary? Should I be asking for a higher salary & no allowance, or does it make no difference at all? Thanks.

Depends on the contract. If you take car allowance in cash it is same as normal pay so no difference to tax. Might be different if you take an actual car depending on CO2 etc.
When I had car allowance and cash it was a good deal for me as I still got car allowance paid out at same rate throughout maternity leave - something to consider, in addition to Bramshott's good point about what pension and pay rises are based on.

Depends if car allowance is treated same as salary and takes you over the 40% threshold I think.

I think cash is the best option most of the time (always has been in my experience). Unless of course, you don't have a car or you are working in the field/travel a lot for work. In which case, I would then go for the car!

Oh thanks - I understand now

No there is absolutely no difference in the taxation of your car allowance or salary. I take a car allowance, it just gets taxed as extra salary.

The difference is if you actually take a car ...

Although as Bramshott says, my employer's pension contributions are based on my salary EXCLUDING benefits such as car allowances.

Thing is you need to check proposed contract, as what happens to pension, mat bens etc. will depend on employer's policy, which may be more generous than legal minimum.

Lizs is right, car cash would make diff to tax if it took you into 40% band. But it would be no diff than if you had equivalent cash IYSWIM.

Sorry forgot to say good luck for your interview! I wouldn't bring this topic up in a 1st interview anyway but it is good to have the background info.

Thank you all, wonderful MN'ers, I knew you'd know. Somewhere on here, someone knows everything....

Thanks for the good wishes & I'll discuss terms at the appropriate time, if I'm flippin' lucky..........

I'll post if I get it, if not I'll be sobbing in a hole in the ground -it's the perfect job. And there will be no more maternity leave, hear me??