+1 on this, you get stung big time in relation to a company car as a taxable benefit. In your shoes I'd take the allowance, even though that will be taxed. I would then look to get a smart 'shed' outright, if you think your position in the company and the nature of your job will allow that.
So spend a little bit of money on a decent shed, get the benefit of the allowance to use for fuel for work, spending on work lunches or even buying a spandex cat suit if you so wish
It's a bloody good job SMD doesn't get a company car allowance