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Original poster

Car Allowance rights on maternity leave

10 replies

BeMauveFox · 19/01/2025 22:35

Hello, I’m looking to see if anyone has had any experience with maternity leave and their rights to still receive their car allowance.
I know some companies have this in their policy but if there is no specific mention of this in contracts is it a legal requirement to still pay a car allowance? The contract specifies that an employee can have a company car or car allowance and it is for business/personal use but due to already having a car at the time of employment, an allowance was the best option.
It is paid through monthly payslips and it is stated separately on the payslip. Does anyone know what the legal standing with this scenario is and if it is deemed as a benefit rather than remuneration? Everywhere I’ve researched so far seems to provide conflicting info with no definitive answer- bit of a minefield!

OP posts:
Azandme · 19/01/2025 22:36

It's a benefit, and you should retain it.

LIZS · 19/01/2025 22:40

If it a contractual benefit you should continue to receive it.

CarParkWorries · 19/01/2025 22:55

It's a benefit. You keep it whilst on maternity leave. The same way you retain other benefits such as accruing annual leave, medical health insurance etc.

jackstini · 19/01/2025 22:57

I kept mine, both times, as it was classed as a benefit

Original poster
BeMauveFox · 19/01/2025 23:15

Thanks for the quick replies everyone, that’s reassuring. From other searches it appears as though some organisations class it as remuneration and use that as a reason to not pay it, it is even ambiguous on the HMRC website which is frustrating!

OP posts:
Ariela · 20/01/2025 00:15

It is a benefit you retain, however given the amount you are taxed on top if you don't actually need it you may be better off without the allowance.
I gave my company car back, as DH had a car he didn't use in the week (as he had other transport), and that saved me paying tax on it. As it was I walked everywhere with 1st child, so rarely used the car!

ByQuaintAzureWasp · 20/01/2025 07:54

Ariela · 20/01/2025 00:15

It is a benefit you retain, however given the amount you are taxed on top if you don't actually need it you may be better off without the allowance.
I gave my company car back, as DH had a car he didn't use in the week (as he had other transport), and that saved me paying tax on it. As it was I walked everywhere with 1st child, so rarely used the car!

It's excess income, why would she give it up? That makes no sense whatsoever.

Ariela · 20/01/2025 11:12

@ByQuaintAzureWasp Depends - if it takes you down a tax bracket or not.

Azandme · 20/01/2025 13:56

BeMauveFox · 19/01/2025 23:15

Thanks for the quick replies everyone, that’s reassuring. From other searches it appears as though some organisations class it as remuneration and use that as a reason to not pay it, it is even ambiguous on the HMRC website which is frustrating!

The ACAS website is very clear.

Original poster
BeMauveFox · 20/01/2025 14:21

Thanks everyone, I have done the calculations and I would be better off even including tax in keeping the car allowance.

I have looked at the ACAS website but didn’t see anything specific in relation to car allowances, I will look again tonight in more depth. Thanks!

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