As someone, somewhere on STW knows about (has an opinion on?) everything, tell me about car allowances :
I'm looking at a new job which has a car allowance as it requires some travelling about the place. At first sight my choices appear to be :
1) Spend all my money and buy a car, using the allowance to repay myself (+ve minimal risk, I own the car, -ve spending all my slush fund, I own the car that has a lot of business miles on it)
2) Get a big loan & use the allowance to pay it back (+ve I own the car at the end of it, -ve big loan for 3 years which would be an issue if I get made redundant (again))
3) Get a lease car (+ve brand new car every 2 years, -ve no residual value, probably tied to a 2 - 3 yr lease)
Do you get taxed on the cash amount? at normal income tax rates? or on the car?
If say I spend £200 a month on a ford focus, can I pocket the rest?
Do you normally just get given the cash and a minimum spec for an acceptable car and told to get on with it? or do you claim back the allowance with receipts?
It'll have to be the family car so we're talking ford mondano territory, nothing flash.
As I see it, the allowance has no real cash value to me and could even cost me as I'll go from having a fully depreciated 15 yr old 170k mile car in the drive to having a brand new rep mobile that depreciates like buggery!
Crikey, that's a lot of questions now I've re-read it!