Hi Domino99.

Well done on the job offer.

I'd imagine the car allowance will be treated as normal income, exactly the same way that HMRC does as well I think?

Your actual travel expenditure should be allowable expenditure (petrol, servicing, insurance and tax) which will go towards offsetting the effect on you of this extra income.

As for depreciation of the vehicle as a result of additional work driving (rather than commuting), I'm not sure how your trustee would view that. Worth asking them I suppose to see what they say but they might not see this as being allowable.

Thanks for the response TDA.
I realise the car allowance will be subject to usual tax etc., but I think it's going to be difficult to calculate what it will cost me from month to month regards petrol. I will only be able to claim minimal expenses regards mileage - about 13p per mile which is the part I'm concerned about where it could end up costing me money where I can't cover it because car allowance is being taken as surplus income.

Thanks.

Domino

I think that should all cancel itself out shouldn't it Domino99?

You have a car allowance towards the more fixed costs (insurance, tax servicing etc).

The more variable cost (mileage) will be paid in addition to the car allowance.

So...

If you drive 1,000 work miles next month it might cost you around £130 in fuel (depending upon type of car obviously) but you can reclaim £130 in mileage for that.

If you drive 500 work miles next month it might cost you around £65 in fuel but you can reclaim £65 in mileage for that.

If that's the case there's no issue? Mileage reimbursement for fuel actually used (and reclaimed) shouldn't be seen as income.

In my previous job I used my own car for business and was able to claim 45p per mile and had to provide a petrol receipt to support the claim, not the basis of the claim.
So, if I drove 100 miles my claim would be 100 x 45p therefore re-imbursing me £45 and not the petrol receipt for example of £35.
Using the same calculation with someone with a car allowance and the company only paying 13p per mile I would only be re-imbursed £13 so it's kind of example where I could find myself in trouble if I don't get the petrol cost itself re-imbursed in addition to the low mileage allowance. I guess I need to wait until I get my written offer detailing what's allowed.
Is there anyone out there in this position?
I'm also praying that there's no restrictions on car age (mine's 5 years old) or number of doors etc.

Thanks.

Domino

But you're getting a fixed car allowance every month in addition to your salary and mileage reimbursement?

And you're getting a (lower) mileage reimbursement rate as well?

Sorry if I've misunderstood and have confused things.

Not a problem - I should have explained the situation more clearly! So, yes I will be receiving the car allowance but suppose I need confirmation from company if they are re-imbursing both petrol cost in addition to the mileage. Hopefully they are then this isn't an issue.

Thanks.

I doubt that's going to be the case Domino99.

It looks to me like the car allowance will contribute towards depreciation, servicing, insurance and road tax.

I think that the mileage rate will cover the petrol expenditure.

That does mean that all of your costs should be covered though, provided that your actual cost for fuel isn't more than 13p per mile.

Let us know when you find out.

What type of car is it, Domino99? As long as it is not too fuel-inefficient then I doubt you would have an issue. Also, your trustee should take account of the increased cost of maintaining the car due to high work usage and your contribution payment should reflect that.