Car Allowance on Furlough

Shedelaney

I receive a car allowance each month that is part of my contract and I have only received 80% due to being furloughed, is this correct?
I’m unable to get through to HMRC to confirm either way, before I contact my employer.
Thanks

Jeremy535897

A lot of employers would probably have reduced your pay to 80% of salary without paying anything for the car allowance, as they weren't sure they could then include it in their claim for CJRS. If you agreed to reduce your pay to 80% of what it was, probably as part of agreeing to be furloughed, then they are correct.

lopsyfa

Shedelaney said:

I receive a car allowance each month that is part of my contract and I have only received 80% due to being furloughed, is this correct?
I’m unable to get through to HMRC to confirm either way, before I contact my employer.
Thanks

You want the taxpayer to pay 100% of your car allowance?
If you are on furlough, you won't be using the car anyway for any official duty. As above, I think paying you 80% of the car allowance is more than generous.

Shedelaney

I’m not asking for the taxpayer to pay for my car allowance, I think the company should pay 100% as they refused to issue me with a car when I joined the company and I had to take out finance to buy a car!
I thought when the company claims from the government it was for salary only?

Jeremy535897

A cash car allowance, if contractual, can form part of your reference salary for CJRS. What matters to you though is what your contract of employment, as amended by the furlough agreement, entitles you to receive.

Shedelaney

Thanks, I received a letter on 27th March to say I’ll be on Furlough leave from 30th and wasn’t asked to sign anything, I haven’t heard from the company since apart from an explanation of my payslip which I received by post last week, the whole thing concerns me as I have an ongoing grievance!

Jeremy535897

That is not what is required. The guidance says:

"Your employer is responsible for claiming through the Job Retention Scheme on your behalf and for paying you what you are entitled to. You cannot apply for the scheme yourself.

Both you and your employer must agree to put you on furlough - so speak to your employer about whether they can claim. If your employer and a trade union reach collective agreement that is also acceptable, for the purpose of your employer claiming through the scheme. Once agreed your employer must confirm in writing that you have been furloughed to be eligible to claim. Contact your employer if you do not receive confirmation.

If you are concerned that your employer has not claimed on your behalf, you should speak to your employer. HMRC will not be able to provide information about individual applications."

You will see that you don't specifically have to agree to be furloughed in writing, but the employer must discuss it with you.

The guidance does not deal with reducing your pay to the level the Government will reimburse. That is a matter for you and your employer to agree. It is possible, but unlikely, that your contract of employment allows the employer to reduce your pay unilaterally. If not, they cannot just impose a pay cut. Having said that, if you kick up a fuss, they may decide to make you redundant. I don't know how long you have worked there. The ongoing grievance also can complicate things.

Shedelaney

That’s really helpful, thank you!
I will be with the company 4 years in August and this is a perfect opportunity for them to get rid of me and not face a potential tribunal, which is looking likely!
Thanks again!

Jeremy535897

You may be interested in this:
https://www.citizensadvice.org.uk/work/problems-at-work/employment-tribunals-from-29-july-2013/making-an-employment-tribunal-claim-is-it-worth-it/employment-tribunals-unfair-dismissal-claims/legal-tests/employment-tribunals-legal-tests-for-unfair-dismissal-claims-redundancy/