Most of our employees receive a car allowance paid monthly with their salary.

One employee thinks she is entitled to receive car allowance for the first 26 weeks of Ordinary Maternity Leave. HMRC guidance state that payments which are earnings for Class 1 National Insurance Contributions should be included i.e. salary and car allowance. The employee has cited practice in local government employees and the EOC. I’m not sure how relevant local government practice is to a business. Also The EOC guidance in this aspect of entitlement is vague and mentions “uncertainty” about what constitutes “remuneration”.

We have not paid car allowance to an employee on maternity leave, we do however, include this sum in the calculation of maternity pay along the guideline provided by HMRC.

Does anyone have experience of this and what the legal requirements are about employees receiving car allowance during OML?
Lawrence Donaghy