Any car allowance is a cash payment and, yes, is taxable as an income payment.
What is a good car allowance?........... there are no real guidelines for this.......just use your logic - what would it cost you to lease the same car? That would be a good guideline I think.
Would I be correct in saying that if the employee submits a mileage claim to the company for mileage done on the company's behalf, that the car allowance could be covered by this, rather than as a taxable addition?