Treatment of Guaranteed Expenses by lenders (and by Revenue)

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Emma36

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How are expenses treated by lenders in context of income multiplier please?
On top of salary, I receive €300 per/w expenses, which are classified as motor expenses. This income is net/ tax-free. I do not have a car.
For my preferred lender, on the salary cert, motor expenses is listed as a category against which income can be listed.
My question is whether it is factored in and, if so, half/ all?
Thanks.
 
If it is a guaranteed payment, my sense is that the banks would include it as salary.

However, I'd be surprised if Revenue weren't very interested in this arrangement (unless your payment is an after-tax car allowance which you're saying it's not).
 
Maybe my post was modified by a moderator, as I don't think I mentioned revenue.
Can I assume that revenue isn't automatically notified by a lender of particulars submitted in an application?
 
Actually Gordon Gekko, I think it is classified as an after tax car allowance. I just don't use the money for a car. Thanks.
 
+1 Mathepac.
I know someone who is in receipt of such an amount from their MNC. Seems strange to me that it has never been picked up by Revenue; my advice was it should have been ... yet that was years ago; some other employees have joined and left the company in the interim. I wonder how Revenue will get the tax.
 
Hi Emma36,

If its guaranteed and this can be demonstrated to the Lender then I think they will factor it in.
 
@Setanta12
From the MNC who had the obligation to deduct and remit, but in any event to remit, the tax due. Unless Revenue believes the employee has knowingly received taxable payments tax-free, they generally pursue the employer.
 
Emma36 said:
Actually Gordon Gekko, I think it is classified as an after tax car allowance. I just don't use the money for a car. Thanks.
Click to expand...

Sounds okay so. €300 is net and banks absolutely do include them as salary. You need to find out the gross (e.g. €7,500 per year).
 
Eh ... its not taxed. It's simply added to the net.

Hence why the Revenue might be interested - you need to convince your Bank that it is part of your contractually agreed remuneration and not a discretionary bonus, which can be stopped unilaterally without warning.
 
Setanta12 said:
Eh ... its not taxed. It's simply added to the net.

Hence why the Revenue might be interested - you need to convince your Bank that it is part of your contractually agreed remuneration and not a discretionary bonus, which can be stopped unilaterally without warning.
Click to expand...

How do you know it's not taxed? Emma said it's an "after-tax car allowance".
 
I think she means that its added onto her wages after the normal wages are taxed in the normal manner.

(It took me a while to understand that Yes - MNCs can feck these things up easily despite having the best tax-advisors, that No - I wasn't misreading it or misunderstanding it and Yes- it could cost them dearly.)
 
Thank you all for commenting + apologies for lack of clarity and for contradiction. I believe it is a car allowance payment. I do not pay tax on it. It is not referenced in my weekly pay slip, nor is it referenced in my P60.

When I posted my query last night, I did not reference revenue; I have no idea who added (and revenue) to the title of my post. My query is specifically how lenders will view the income.

The evidence of the payment is a monthly lodgment into my bank account from my employer (amount varies whether it's a 4 or 5 week month) but equates to approximately €1200 or €1500 per calendar month. The other evidence of the payment will be on the salary cert; my employer will reference it on the salary cert as additional income of €15600 p/a.

Thanks.
 
Hi Emma. Your lender will want proof that it is not discretionary i.e. that you are contractually entitled to it, or they will not include it in their calculations of your monthly disposable income. They need to be sure it will continue.

For this reason, me and other posters are wondering as to the tax implications - if you are contractually entitled to it; you should be taxed on it. (Just because you're not, and just because your employer is large (from West Coast?), does not mean tax is not payable) (You'll also find comments from other people on other matters in addition to what you post; price you pay for free advice! (It's also worth remembering too, in your case!))

Your issue is, you need to demonstrate your entitlement to this amount next month, the month after, the month after that etc etc. (I know this to be the case with one Lender in particular)
 
Many thanks Setanta12; I sincerely appreciate the free advice and don't mind at all the additional commentary on revenue implications! I don't think I mentioned the size or location of my employer so no idea where the large/ West Coast piece comes into it :) I work for an indigenous SME.
 
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Hi Emma,

If I'm reading this correctly, you seem to be saying that:
1. You receive €15,600 p.a. into your bank account annually, without paying tax on it; and
2. You believe that this is a car allowance but that you don't have a car.

I am unable to reconcile both points!? There's something not quite adding up here....
 
Some jobs pay a car allowance without any obligation to actually have a car. It can be a way to bridge a salary gap with something that is taxable like salary but not subject to things like employer pension contribution. And it doesn't form part of bonus or salary increase discussions.
 
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