Relocation Package - Birmingham

My employer has offered me a promotion and relocation package for me to transfer to Birmingham from Indianapolis, IN.  The package includes: $1200(£670)/Month for living expenses, Company car and gas card, paid universal phone, and a base salary of $100k (£57,800).

I understand that the cost of living is quite higher in Birmingham than Indianapolis.  I will oversee approximately 300 hourly employees and 3 salary employees.  Is this salary package comparable to similar positions in this area of the country?  I also understand that I will take a 40% tax hit; is this accurate?  I have reviewed the information posted about the company vehicle vs. the allowance; however, I am still not convinced which is the better way to go.  Why do I take a tax hit on the vehicle when they are the owner, insurer, and accountable for the gas while doing business?

Hi there!
Well £58K around the Birmingham area is a fanstastic salary! - At that level of income, you'll be able to go for the 'upper' end of various aspects of your day to day living. You will be on the 40% tax rate, but remember it's not 40% of your total earnings, I'm not a 'tax' expert, but I have some background in taxation. There are 'thresholds' of levels of pay from which your tax is calculated. The threshold to go to the 'upper' tax (40%) bracket I think is around £29,800. So you'll be taxed at the lower (22%) rate for earnings up to this figure. Anything above that figure you'll be taxed at 40%.

Company car tax rules are an area I never got involved in - best to nip over onto the Tax section of this website and post your question their as thier are a number of specialists who know their tax inside out and can further explain what I've just said !

Just for 'comparison' purposes - the average salary across all industries in the UK is £23K. The highest costs of living are in London and the South East. In your situation, you'll be earning just about 3 times the average salary and living in a city that's got a lower cost of living (although Birmingham is starting to get close to London pricing!) - so you'll be pretty much sorted in terms of these aspects of your finances. You don't say which industry you're in, so it's difficult to assess if your salary is comparable. Taking a 'stab in the dark' - take a look at www.jobserve'co.uk which has jobs listings from a variety of industries, do a search around your area/profession and compare that way.

HTH !
Cheers! Dennis! West London UK!!

It sounds like a good deal to me. To just add to what Dennis wrote, your company car will be considered a perk and will result in your tax code being adjusted. In effect it means you will have no, or little, earnings which aren't taxed. Balanced out against the costs involved in buying and running your own car it is worth it if you would have bought a car here anyway.

when I first moved to the UK- I took the company car package.  I figured the convience factor outweighed the additional tax burden.  Now that I've been here for awhile I've started to investigate the car thingy more.  Something I've realized is that there are two different car related benefits.  The first is the car itself and the second is any fuel that you use for personal use but that the company pays for.  Also, the specific tax is based on two things: 1- List price of the car, 2- How "dirty" the car runs.  The Co2 emissions are translated into a percentage which is then multipled by the list price of the car.  For example, my petrol, automatic volkswagen beetle had a list price of £18,000 and the percentage was 32%.  My new car is a petrol/electric hybrid toyto prisisu, list price £19,000 and my percentage is 11%.   That's just for the car.  The private fuel is more.

I've heard things like: If you are the type of person who wants a new car every 3-4 years, it's better to take the fuel benefit.  If you're the type of person who doesn't mind what they drive you should buy a car.  YOu also have to weigh up how long you'll be there, etc....

Sounds like an interesting move - just watch out for that Brummie accent 

I believe the higher rate tax begins around the £38,000 gross salary so you'll get hit at 22% up until then and then 40% after that.
Of course, you have National Insurance contributions as well to factor in.

I couldn't say how that salary compares as I've not had 300+ people working for me but Birmingham is generally considered much cheaper to live in than London or the South East.

As for the company car, I believe the gov't taxes these much more heavily now because, unlike America, they know the environment is going to hell in a handbasket and it was far too easy and cheap for companies to give their employees a car scheme.  So now Britain and much of Europe taxes cars on their CO2 emissions so something like a Smart Car or a Toyota Prius will have very good tax benefits whereas a Jeep Grand Cherokee will not.  I don't know a whole lot on the subject as the only expenses I've been paid for travel is the standard 40p/mile on my own car which works out well if you have a small, gas-sipping car.

Matt