Had a quick look on Google, but not finding a definitive answer.

Do you pay NI on the allowance?

Do most employers allow you to take the allowance even if you don’t buy a car? Anecdotally, I have heard this is possible, but I want to make sure.

It’s treated just like salary, so tax and NI.

Whether you actually need the buy a car (and what age/type/co2 etc) will be in your company rules.

In many cases “car allowance” is just another category of salaried pay that appears in the left column of your payslip along with “basic”, “overtime”, “bonus” etc. The taxman doesn’t care what it’s called and it’s taxed and NId the same as any other PAYE income including employers NI. The only real difference is that the portion of your salary designated as “car allowance ” probably won’t be eligible for matched pension contributions or other benefits calculated relative to basic pay.

Cross post with br. Yes, car allowance policy rules may well say something like “4 door car no older than 5 years” but if you already have a suitable car you can just pocket the post-tax cash each month.

Yep, before all this co2 malarkey I use to run v6’s and v8’s 🙂

After this co2 malarky I still run v6s 🙂

As dc2.0 perfect answer

Dayum, I was hoping it would be non-NI. Thanks all!

Nope, and it also costs the company employers NI.