Should I take a pay cut?

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Topic started by Paul Brett (paulbrett)

I live in Stafford with my partner, John, and work in Birmingham. Work takes up too much of my time at the moment, but for the rest I enjoy relaxed informal meals, concerts, theatre , reading and gardening.

A topic from Work & Money: Employment

paulbrettTue 14/08/07 21:11

They're not calling it that of course, but that's what it will amount to.

Situation is that I transferred into my present company about 3 years ago under TUPE when they took on the work that had been done by my previous employer. TUPE means that I kept my previous terms and conditions (Ts&Cs), which included a car allowance (in lieu of car) and a fuel card for business and unlimited personal use. Both of course are taxable. Because I was not an 'essential' car user, I have taken the car allowance and fuel card to be an integral part of my remuneration, and there are several people in a similar situation.

Since transferring, my car allowance has been frozen at the value it was three years ago. My present employer now wants to harmonise conditions across the company (reasonably enough), but they're using that as the 'reason' to get rid of the car allowance or company car that we still get. So the deal I'm likely to be offered is a hoice between:
• a lump sum and no more car allowance (useful if I needed to buy a car, but it would push me into the higher rate tax band for a year)
• a smaller annual car allowance (but not part of my salary so not pensionable - but still taxable)
• or a smaller lump sum and an even smaller annual allowance (worst of both worlds)

My inclination is to reject all options; but the risk there is that they'll then find a way of putting me onto different Ts&Cs without any compensation at all. In other words the fourth (unwritten) option - lose the allowance completely.

Any ideas?

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