Furlough (Car Allowance)

comeandgo

HarryAinslie said:

LilElvis said:

She should receive £2,500 per month if her employer chooses to place her on furlough.

So the Car Allowance won't be in addition to the £2,500 Salary payment?

No, max from government furlough is £2500.   

HarryAinslie

Do any of you have any direct links to HMRC that says Car Allowance can top it up to £2,500?

I’ve spoken to our company accountant and she said she can’t see anything official so won’t add it to the claim until we can see official details. 

poppy12345

As has been advised the maximum amount you will receive is £2500. You will not receive a car allowance on top of that, unless your employer tops it up.

HarryAinslie

poppy12345 said:

As has been advised the maximum amount you will receive is £2500. You will not receive a car allowance on top of that, unless your employer tops it up.

Hey Poppy, thanks for your reply.  

The Salary itself doesn’t entitle her to £2,500 so she’s hoping to use the car allowance to top it up to the maximum of £2,500

sharpe106

Although not seen anything about car allowance itself. People can claim for shift allowance, commission etc that is contractual.  So I would think car allowance would fall under the same bracket as its in the contract. 

poppy12345

HarryAinslie said:

poppy12345 said:

As has been advised the maximum amount you will receive is £2500. You will not receive a car allowance on top of that, unless your employer tops it up.

Hey Poppy, thanks for your reply.  

The Salary itself doesn’t entitle her to £2,500 so she’s hoping to use the car allowance to top it up to the maximum of £2,500

Going by your figures in the first comment then she's very near to the maximum amount without the car allowance.

Jeremy535897

HarryAinslie said:

Do any of you have any direct links to HMRC that says Car Allowance can top it up to £2,500?

I’ve spoken to our company accountant and she said she can’t see anything official so won’t add it to the claim until we can see official details. 

This question is not about the £2,500 cap (although the extra receivable if the car allowance is included will result in that cap applying). It is whether the car allowance forms part of the "reference salary" for calculating the grant receivable by the employer when furloughing its employees. The guidance on how to work out the amount that can be claimed is at https://www.gov.uk/guidance/work-out-80-of-your-employees-wages-to-claim-through-the-coronavirus-job-retention-scheme

"What to include when calculating wages

The amount you should use when calculating 80% of your employees’ wages is regular payments you are obliged to make, including:

• regular wages you pay to employees
• non-discretionary overtime
• non-discretionary fees
• non-discretionary commission payments
• piece rate payments

You cannot include the following when calculating wages:

• payments made at the discretion of the employer or a client - where the employer or client was under no contractual obligation to pay, including:
  • any tips, including those distributed through troncs
  • discretionary bonuses
  • discretionary commission payments
• non-cash payments
• non-monetary benefits like benefits in kind (such as a company car) and salary sacrifice schemes (including pension contributions) that reduce an employees’ taxable pay"

The car allowance, whilst not specifically listed, is clearly a regular payment the employer is required to make, and should be included.

jackiechan123

I'm in the same boat currently disputing with my employer the fact that they deduced my car allowance last month.
My contract states I will get £xxxx per year car allowance.
My salary is stated elsewhere.
I have received my payslip at £2500 (Capped).
It listed my car allowance as £0.

The bit I'm arguing about is on my "furlough letter" from my employer.

You agree that XXXXXXXX is placing you on Furlough Leave with effect from Wednesday 13 May 2020 in accordance with the JRS.  This means your contract of employment will continue, but you would not be required to come into work or do any work at all during this period.  We will continue to pay you at the maximum allowable under the job retention scheme of £2,500 gross per month during this period. We will continue to contribute to your pension at 5%. All your other terms and conditions of employment remain the same.

It's the 'terms and conditions of your employment remain the same" that I'm hanging my hat on here...   When is a car allowance a separate terms and condition and when is it not?

Jeremy535897

I'm not sure you are asking the right question. Your contract of employment will say something about the hours you work and the wages you will get. It will also say you will be paid a car allowance. So the correct question is whether the phrase "we will continue to pay you at the maximum allowable... of £2,500 gross per month" includes or excludes the car allowance. I think the most logical reading of it is that it includes the car allowance as well, because the clear aim is for the employer to avoid paying you more than the CJRS says it has to. It follows from this that I think they are right, but I am not a lawyer.

LilElvis

Your employer has said that they have placed you on furlough in accordance with the scheme, which would mean calculating the amount payable to you in accordance with the scheme rules - therefore including the car allowance.