Furlough leave and Car allowance

This is such a common question we’ve seen coming through our NEW online chat function.

Can a furloughed employee keep their company vehicle for the duration of furlough leave?

The employment contract will clarify whether the company car can be used for personal use as the furloughed employee will be on temporary leave and not required to work therefore the only use of the car will be personal.

If the company car is provided for business purposes only then an employer can ask for the car to be returned for the time you are on furlough. On the other hand, if cars are provided for business and personal use then the furloughed employee would be entitled to keep the car during furlough.

Will car allowance be included in the 80% furlough pay?

 In the guidance we currently have, the position on car allowances is less clear as there is no specific mention of it in the Government guidance. It is likely to depend on whether the allowance is paid as a separate benefit or as a part of normal basic pay.

This should be found in the employment contract as to whether it is a benefit or part of the contractual salary.

The only mention in the Guidance is that discretionary commissions and bonuses are explicitly excluded from the 80% calculations and cannot be reclaimed under the Scheme. However, if car allowance is considered a contractual payment then the thought is that they should therefore be taken into account.

The above is subject to further updates on the Guidance and details being released, but for now, that is the view we take and we will update this blog if and when we are provided with more information by the Government. 

Got more questions? Want to speak to one of our team?

If it is coronavirus related, please email coronavirus@thrivelaw.co.uk for free advice.

We also have a new live chat function on the website so get in touch and we will answer any of your employment law related enquires.


Please note this blog is for reference purposes only. It does not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking or deciding not to take any action. Please contact us if you have any questions on enquires@thrivelaw.co.uk


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