Maternity Leave and Company Car Question

I hope I created this thread in the right forum...apologies to the mod if not...

My wife is currently on maternity leave but her employer has informed her that she is not allowed to use her company car while she is on maternity leave.

She is in full time employment with her employer and it states in her contract that she is entitled to a company car. He is not paying her maternity pay while she is on leave. He has told her that if she doesn't give it back while she is on maternity leave that she will have to make the repayments on the car herself!

Our question is: is her employer allowed to take the car away from her while she is on maternity leave even though it says in her contract that she is entitled to one? The employer has no other need for the car, he simply doesn't want her to have it while she is on maternity leave.

Thanks for the help and advice.

Have you fully read the contract? It might have a couple of provisos relating to the use of the company car that it is to be used while on company business etc that would give the employers an out.
I can understand where they're coming from though it is mean-spirited and might be the opening salvo in making it uncomfortable for your wife to return to work for them and be a low level form of constructive dismissal.

You also have to factor in the BIK on the car while on leave, no business miles means your are taxed on 30% of the Origional Market Value. I have see people come with a company car comming back from leave and finding out their first (few) pay packets is eaten up paying tax on 'their' car.

OP, have a look at some old threads on this topic. Start here, and here and here.

Is it a working car (like a sales rep) or a perk car? If a working car, it is not unusual to retain the car to be used by whoever is covering the role.

What does he mean by repayments? Is it BIK or car loan?
Secondly, how is she paying the BIK given she is not getting paid by the employer?

Deas said:

Secondly, how is she paying the BIK given she is not getting paid by the employer?

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Revenue treat BIK as a payment, thus Tax, PRSI and Income levy is due on it.

That's my point. This money will be due to revenue and if not being paid by her employer, how is she paying the BIK on the car?

Complainer said:

Is it a working car (like a sales rep) or a perk car? If a working car, it is not unusual to retain the car to be used by whoever is covering the role.

Click to expand...

Sorry for taking so long to reply guys, I thought I would get email notifications on your replies, I've changed my settings now.

In answer to some of your questions...

The car is use work use and personal use, she does not pay mileage for personal use and her contract does not mention any further details on the use of the car, just that a company car would be supplied.

When he told her that she could make the repayments on the car if she wanted it he meant literally to make the loan repayments on it, something like €450 per month for the 6 months she is on leave!

She has been on maternity leave for the past 8 weeks and has use of the car so far. She is not on maternity pay so not sure what the standing is on the BIK, one previous poster reckons she'll be paying lots of tax when she returns to work, I hope he's mistaken

I will take a read of some of the links which you sent also.

Thanks so much for the replies... looks like it's not really a black and white situation...

Deas said:

That's my point. This money will be due to revenue and if not being paid by her employer, how is she paying the BIK on the car?

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I think the answer here is that she's not paying the BIK right now.

It's looking like she'll be caught for a lot of tax when she returns to work now, right? Unless her employer isn't telling the revenue that she's using the car??

It's not that easy Trotter. Revenue charge BIK on a graded scale based on the amount of business miles completed and the original market value of the car. The less the business mileage the higher the BIK, normally corrected in December annually if underpaid in the year in question. Given your wife is on Maternity Leave she will not be clocking up the mileage.

ANNUAL BUSINESS MILEAGE NOTIONAL CASH VALUE (% OF OMV)
0 – 15,000 Miles .......................................30%
15,001 – 20,000 .........................................24%
20,001 – 25,000 .........................................18%
25,001 – 30,000 .........................................12%
30,001 AND ABOVE ...............................6%


I have the above from some time back so the tax amounts may have changed in subsequent budgets. That being said, you should work out the tax liability and decise if it's worth retaining the car.

Separately, what does employer intend to do with car if he takes it back. the loan will still have to be paid. Is someone else doing her job that needs it?

Deas said:

Separately, what does employer intend to do with car if he takes it back. the loan will still have to be paid. Is someone else doing her job that needs it?

Click to expand...

That's another strange thing, he doesn't need the car at all, it wouldn't be used by anyone else, so to answer your question I don't know what he'd do with it.

I hope someone can help. I am currently on maternity leave and will be paid until end of Jan. I will then take 16 weeks unpaid leave and return to work in June.

I have use of a company car valued at €30K. I plan on driving about 20000 business km's before the end of 2010. Is it economical for me to keep the car for my unpaid leave or should I hand it back at the end of Jan until I return to work? I can hire a car for €1500 for this period of time.

I would really appreciate any help. I presume if I hand back the car for these months I will not have to pay back the BIK I'd owe on it on returning to work?