Benefits paid during Maternity & Adoption Leave
New guidance has been published for employers who provide non-cash benefits to employees when they are on statutory maternity or adoption leave. The guidance specifically refers to situations where no cash earnings are paid. This typically occurs where there is a contractual obligation to provide non-cash benefits to employees.
The definition of non-cash benefits includes the following:
- company cars, mobile phones and assets provided to employees for non-business use, without ownership being transferred to the employee
- insurance provided under company insurance policies such as medical and dental insurance as well as employer-provided health checks
- childcare and other non-cash vouchers which can only be used by the employee for qualifying childcare and are not transferable
The new guidance considers the impact on tax and National Insurance recording and reporting obligations. The guidance also comments on making tax refunds to employees who are receiving non-cash benefits but no cash earnings.