UK Tax

UK tax questions? Ask a UK tax advisor for answers ASAP

Ask an Expert,
Get an Answer ASAP!

I have a query regarding car allowances and salary

Customer Question
I have a query...

I have a query regarding car allowances and salary sacrificing

Accountant's Assistant: The Accountant will know how to help. Please tell me more, so we can help you best.

I am looking to salary package a vehicle including running costs and will use the car primarily for work. My employer has also offered to pay me a vehicle allowance that will be taxed. I am wondering whether I can do both or its one or the other?

Accountant's Assistant: Is there anything else the Accountant should be aware of?

Not that i can think of.

Submitted: 4 months ago.Category: UK Tax
Show More
Show Less
Ask Your Own UK Tax Question
Answered in 2 hours by:
4/3/2018
UK Tax Professional: Dr. Fiona Chen, Certified Public Accountant (CPA) replied 4 months ago
Dr. Fiona Chen
Dr. Fiona Chen, Certified Public Accountant (CPA)
Category: UK Tax
Satisfied Customers: 1,458
Experience: Former IRS Revenue Agent
Verified

I'm Fiona, former IRS revenue agent. I am looking at your question and will get back to you soon. Fiona Chen, MPA, Ph.D., CPA, ABV, CFF, CITP,IMTA

Ask Your Own UK Tax Question
UK Tax Professional: Dr. Fiona Chen, Certified Public Accountant (CPA) replied 4 months ago

Dear Customer,

If your employer can do both, take both.

If just one over the other, it depends what type of car allowance they are thinking of and what type of car they are offering.

Generally speaking, having a company car is much more beneficial if the company also pays for the insurance [it should] and gives you a gas card and takes care of maintenance.

The part of personal driving could be included as part of your W-2 income. The amount is not much but may be required by the IRS.

Don't call either one salary sacrifice. They are employee benefits.

If you get a car allowance without reporting requirement, it is called non accountable plan. The employer will report on your W-2 as part of your income. You report your actual car expenses, mileage or actual expense method on your Schedule A, miscellaneous subject to 2% of your adjusted gross income.

Regards,

Fiona

Ask Your Own UK Tax Question
Customer reply replied 4 months ago
Sorry I was of the inderstanding I was getting advice for the Australian tax system.
UK Tax Professional: Dr. Fiona Chen, Certified Public Accountant (CPA) replied 4 months ago

Dear Customer,

Thank you for pointing it out.

Ignore the Schedule A part. The rest of the advice still applies.

https://www.ato.gov.au/Individuals/Income-and-deductions/Deductions-you-can-claim/Vehicle-and-travel-expenses/Car-expenses/

Please feel free to follow up.

Regards,

Fiona

Ask Your Own UK Tax Question
Customer reply replied 4 months ago
in short I can salary sacrifice a car and its expenses and my work can pay me a car allowance as well? This will not affect my tax situation at all?
UK Tax Professional: Dr. Fiona Chen, Certified Public Accountant (CPA) replied 4 months ago

Dear Customer,

The situation will increase and likely increase your taxable income. But you get to deduct the business use part. Your actual wealth and benefits will increase, as well. It does not worth to bypass the great benefits.

Regards,

Fiona

Ask Your Own UK Tax Question
Customer reply replied 4 months ago
No I dont get to claim the business use part!!! The tax benefits come by my work allowing me to salary sacrifice thus expenses coming out pre tax. What i need to know is can I receive a car allowance from them as well. Can you forward my query to a Australian accountant who understands the law here???
UK Tax Professional: Andy4712, Attorney replied 4 months ago
Andy4712
Andy4712, Attorney
Category: UK Tax
Satisfied Customers: 776
Experience: Attorney.
Verified

Here is some info:

https://www.ato.gov.au/Individuals/Income-and-deductions/Deductions-you-can-claim/Vehicle-and-travel-expenses/Car-expenses/

http://www.fleetfinancials.com/channel/vehicle-research/article/story/2014/06/company-vehicle-or-reimbursement-tips-on-setting-fleet-policy.aspx

Ask Your Own UK Tax Question
Customer reply replied 4 months ago
This information does not help me at all. I am starting to get frustrated that I have paid 70 dollars for professional advice they noone can seem to answer and just referring me to websites i could and have googled in five minutes.
UK Tax Professional: bigduckontax, Accountant replied 4 months ago
bigduckontax
bigduckontax, Accountant
Category: UK Tax
Satisfied Customers: 5,326
Experience: FCCA FCMA CGMA ACIS
Verified

Hello, I am one of the experts on Just Answer and pleased to be able to help you with your question.

I assume we are referring to UK taxation, please confirm?

Ask Your Own UK Tax Question
Was this answer helpful?

How JustAnswer works

step-image
Describe your issueThe assistant will guide you
step-image
Chat 1:1 with an uk tax professionalLicensed Experts are available 24/7
step-image
100% satisfaction guaranteeGet all the answers you need
Ask bigduckontax Your Own Question
bigduckontax
bigduckontax
bigduckontax, Accountant
Category: UK Tax
Satisfied Customers: 5,326
5,326 Satisfied Customers
Experience: FCCA FCMA CGMA ACIS

bigduckontax is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Sam

Sam

Accountant

6,546 satisfied customers

26 HMRC expertise, PAYE, Self Assessment ,Residency, Capital Gains, CIS ask for Sam Tax

bigduckontax

bigduckontax

Accountant

5,326 satisfied customers

FCCA FCMA CGMA ACIS

TEAP007

TEAP007

Tax Preparer

759 satisfied customers

Fully Trained Inspector of Taxes / District Inspector/ Team Leader/ Offshore Consultant/ 41 years

Andrew Baker(baktax)

Andrew Baker(baktax)

Personal Tax Adviser

756 satisfied customers

35+ years experience in income tax, CGT, non-residence

berduchwal

berduchwal

Accountant

669 satisfied customers

Qualified accountant and bookkeeper running my own practice since 2008.

Clare

Clare

Solicitor

148 satisfied customers

25 years exeperience as a high street solcitor

Mrs-Tax

Mrs-Tax

Tax Adviser

59 satisfied customers

Law Degree, 19 years in UK Tax.

< Previous | Next >

Related UK Tax Questions
I work charity on a self employed basis, receiving a set
I work for a charity on a self employed basis, receiving a set payment each month. My tax claim is basic ie: Home used partly FO business purposes so small claim for heating, light etc. I own my own c… read more
bigduckontax
bigduckontax
Accountant
FCCA FCMA CGMA ACIS
5,326 satisfied customers
I self employed (sole trader) and I do seasonal work. I am
I self employed (sole trader) and I do seasonal work. I am estimating that my profits are going to be too high by the end of March, and I may lose my entitlement to tax credits. I am thinking of buyin… read more
TonyTax
TonyTax
Tax Consultant
High School or GED
8,927 satisfied customers
How can a Company car be treated for tax and accounting purposes
How can a Company car be treated for tax and accounting purposes in the records of the employer and employee. What can be its main benefits?… read more
Sam
Sam
Accountant
Higher Officer HMRC
6,546 satisfied customers
Hi. Im a owner/director of my own small company, drawing a
Hi. I'm a owner/director of my own small company, drawing a minimal salary and dividends. I currently own my car privately but am wondering if I could get a car through my company instead, I think I w… read more
SoftwareVince
SoftwareVince
Senior Accountant
Master's Degree
25 satisfied customers
Hello - looking for some advise on Tax year 2011-2012 I
Hello - looking for some advise on Tax year 2011-2012 I have a salaried job, and pay tax on PAYE. I use my personal car for this, for which my company pays me a mileage rate, and I travel over 10,000 … read more
Sam
Sam
Accountant
Higher Officer HMRC
6,546 satisfied customers
im just about to start a new job which offer 45k + either company
im just about to start a new job which offer 45k + either company car up to value of 490 pm or 5880 per year car allowance, as this is above the 40% threashold i am considering the company car but uns… read more
Sam
Sam
Accountant
Higher Officer HMRC
6,546 satisfied customers
I recently started work on a self-employed basis for a company
I recently started work on a self-employed basis for a company who sends agents such as myself to visit clients on behalf of their solicitors and obtain signatures and details for a variety of legal c… read more
TonyTax
TonyTax
Tax Consultant
High School or GED
8,927 satisfied customers
Should i put car in my name and not the companies.
If i want the car to be in my name and not my company's. If the value of the new car is 20k and CO2 is 130g. The company is not vat registered and pay corporation Tax at the lowest rate. What would be… read more
Sam
Sam
Accountant
Higher Officer HMRC
6,546 satisfied customers
I have a personal car which I use for work. My company contributes
I have a personal car which I use for work. My company contributes to the cost of the car through a flexible benefits package of circa £5,000 pa. This "flexible package" is also to cover other benefit… read more
TonyTax
TonyTax
Tax Consultant
High School or GED
8,927 satisfied customers
I started a new job at the end of January this year. I was
I started a new job at the end of January this year. I was entitled to a company car but my employer didn't have one available at the time. Instead they supplied me with a hire car. I had the hire car… read more
TonyTax
TonyTax
Tax Consultant
High School or GED
8,927 satisfied customers
I have been offered a staff position within my company that
I have been offered a staff position within my company that I have worked for 23 years as a hourly paid person. The new yearly pay has been offered to me at £38,000 plus a company car (C Class). I wou… read more
Sam
Sam
Accountant
Higher Officer HMRC
6,546 satisfied customers
I am employed in sales and receive an annual salary. I have
I am employed in sales and receive an annual salary. I have a company car and a fuel card which covers all my fuel costs, both work and private. I also have a mobile phone. At the end of the financial… read more
TonyTax
TonyTax
Tax Consultant
High School or GED
8,927 satisfied customers
Hi Sam, Hope you are well! Does it help save tax if employer
Hi Sam, Hope you are well! Does it help save tax if employer paid for my monthly car payments i.e. its my car but the employer pays as car allowance. I am a highrate tax payer.… read more
Sam
Sam
Accountant
Higher Officer HMRC
6,546 satisfied customers
I start a new job next week, but really confused how the company
I start a new job next week, but really confused how the company car tax works. My new salary will be £36000 per year. The company have offered me a company car or a car allowance. Can I presume the a… read more
Sam
Sam
Accountant
Higher Officer HMRC
6,546 satisfied customers
Hi I am about to submit a claim for business mileage on
Hi I am about to submit a claim for business mileage on a P87 form and would be grateful if you could check my numbers and advise whether I am able to claim anything else. In an earlier question last … read more
TonyTax
TonyTax
Tax Consultant
High School or GED
8,927 satisfied customers
We are looking into purchasing a van for my husbands business
We are looking into purchasing a van for my husbands' business via a finance lease. Are the lease rental charges fully allowable to offset against income? Would this include the intial lump sum paymen… read more
Sam
Sam
Accountant
Higher Officer HMRC
6,546 satisfied customers
Hi there. I am self emplyed and thinking about buying or leasing
Hi there. I am self emplyed and thinking about buying or leasing a car and wondered which would be better for tax purposes? Also, if buying, not sure about whether to buy new or 2nd hand and if it mak… read more
TonyTax
TonyTax
Tax Consultant
High School or GED
8,927 satisfied customers
Please could you help I Purchase two new vehicles and not sure
Please could you help I Purchase two new vehicles and not sure what the annual allowances will be, one cost £11195.00 and one was £20989.00 I need to know what they will be and which boxes I put them … read more
Sam
Sam
Accountant
Higher Officer HMRC
6,546 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x