Car allowance taken away during COVID-19

LewisOG

My company have taken away our car allowance during the period of lockdown and have said they have no idea when it will return, even when we return back to the office. Is this something they can do? I cannot see anywhere in my contract that says the car allowance is discretionary or can be removed at any time. The majority of us have bought cars based on the amount of monthly car allowance we receive so is obviously leaving us with financial stress. Does anybody have any idea?

Jeremy535897

You are entitled to be paid under the terms of your contract of employment, as amended by any furlough agreement. What did you agree to? Have you been furloughed or are you working from home?

Thrugelmir

Have you been furloughed? 

[Deleted User]

It depends how your car allowance is structured. Many are as far as the contracts are concerned a taxable discretionary bonus and nothing more. As far as tax is concerned a car allowance is purely taxable income and is treated no differently to any other employment related payment, companies just like to split it out for historical reasons. 

You say there is nothing in your contract about the employer being able to revoke the car allowance, but is there anything in your contract about the car allowance, stating that is is fixed, to be paid monthly etc. If it forms part of your contractual remuneration then they are legally required to continue paying it, however nearly all are not contractual, but discretionary bonuses even if not worded that way in obvious terms. 

If it is not a contractual obligation for them to pay it then I very much doubt that they will change their mind, if it is a contractual obligation and this adds undue cost to the business and people enforce it they may make people redundant to cover the additional cost.

LewisOG

Thanks for the replies. 
I haven't been furloughed. The thing I am most annoyed about is they are not giving us any idea when the allowance may return. They are saying that we won't need the car allowance as we aren't going to any meetings etc. however this is contradictory as the allowance is given to all staff, including those who aren't expected to attend business meetings and those who would never have to do so.
I have found a copy of my contract. My salary is broken down into two amounts, salary and car allowance. It isn't specified as a bonus and has always been portrayed as a way of boosting our salary. It is paid monthly alongside my salary. There is a point in the contract about bonuses being paid at company discretion, however the car allowance isn't specified as a bonus.

Jeremy535897

A contract of employment cannot normally be amended to reduce pay without the consent of the employee. If you don't agree, they may decide they have to go through a redundancy exercise.

[Deleted User]

@LewisOG
On the basis of it being a separate item and not specified (at least obviously) one way or the other then I think you will probably need to take proper advice from someone who can read through the contract if that is the way you want to go (usually they are kept separate for a reason), it is likely to be more complicated than someone without an understanding of employment law is able to give you a solid opinion one way or the other.
I suspect (as I mentioned in the previous post) that they probably can not afford to keep everyone employed if the allowance stays in place so have taken the view that they can abolish it and in terms of telling people when it might come back they do not know, as it depends when the company becomes profitable again.