HMRC has issued new guidance for employers who provide non-cash benefits such as company cars and critical illness cover to staff taking maternity and adoption leave.

Following changes to legislation in 2008, these non-cash benefits must be provided during additional maternity or adoption leave as well as during ordinary maternity or adoption leave.

The new guidance, published on 15 April 2009, explains that, where employees receive cash earnings plus non-cash benefits, the taxable elements of non-cash benefits should be reported to HMRC on form P11D or P9D, and any tax due will be collected through the self assessment system or the PAYE system.
Employees who receive non-cash benefits but no cash earnings, and are on a cumulative tax code, may be entitled to refunds of income tax when they are on statutory maternity or adoption leave.