Car Allowance for Directors

What is the uk average for Car allowances for Directors

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I am currently reviewing our company car allowances to make sure that they are in line with UK averages. Croner shows £10300 for Directors which to me seems a little high. Is this really the average out there? Any thoughts/comments would be most welcome. Thanks

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By Accountant A
05th Feb 2020 11:13

What sort of director? One man band or FTSE100 main board?

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Replying to Accountant A:
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By AnthonyG
05th Feb 2020 11:24

Good point. 4 directors £30m turnover

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By Tax Dragon
05th Feb 2020 11:32

What sort of average?

The mean will almost certainly be different from the mode.

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By paul.benny
05th Feb 2020 11:59

Why do you want to be "in line with UK averages"?

Many people behave differently when they're spending someone else's money - would they buy gas guzzling behemoths out of their own pocket?

It's not just the car/car allowance but the entire remuneration package, even more so if it's a cash allowance (rather than a permitted lease cost).

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Replying to paul.benny:
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By AnthonyG
05th Feb 2020 12:19

Yes totally agree on the spending someone else's money and fully appreciate the remuneration package. I'm just interested in whether we are drastically underpaying. Yes it's a cash allowance and we pay around the £6k mark so considerably lower than the Croner average of £10300.

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Replying to AnthonyG:
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By Tax Dragon
05th Feb 2020 12:23

Ask Croner where they got their number. Do they include all the directors who get no "car allowance" at all?

What's the point of a car allowance anyway? Give me more salary every time.

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By dejaneiro2005
05th Feb 2020 12:37

At larger SMEs I have seen allowances equal to 1% of gross annual salary per month.

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By AnthonyG
05th Feb 2020 14:43

I'm guessing Car allowances are not that popular

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By tom123
05th Feb 2020 15:55

Car allowances are just salary, surely?

Only difference being they can be excluded from being pensionable, and need not be increased in line with basic pay (should that increase)

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Replying to tom123:
RLI
By lionofludesch
05th Feb 2020 16:09

tom123 wrote:

Car allowances are just salary, surely?

Spot on.

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Replying to lionofludesch:
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By tonyshaloms
13th Feb 2020 11:13

However, if a car allowance is paid, in my experience the mileage rate is at the cost to reimburse the fuel say 10p, rather than the typical 45p/mile as the car allowance includes depreciation/insurance etc.

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By AnthonyG
06th Feb 2020 09:34

Thanks everybody for yesterday's comments. Just thought I'd post again to say if anyone else has any examples of what they think is a reasonable amount all things considered.

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Replying to AnthonyG:
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By Tax Dragon
06th Feb 2020 11:09

How about setting a new standard? Get to the front of the pack, rather than waiting for last year's averages to be published next year, leaving you at least two years behind the pack?

Here's an ahead-of-trend thought: £6k for a standard car, £10k for an electric one and £15k for directors that give up having a car. You could call this last a non-car allowance.

You read it here first.

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By Bertie Black
13th Feb 2020 13:17

I'm in the construction industry. £1bn turnover. Directors get either £7.3k, £8k or £9.2k depending on level of seniority. Hope this is helpful.

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