A new report produced by the audit and consultant firm Deloitte suggests that there is a future for the company car in the UK in spite of figures suggesting a recent decline in the number of company cars sold in Britain.
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The report argues that while the latest HM Revenue & Customs’ figures highlight a decline in the number of company cars since the 2002 reforms in company car tax, this trend could be reversed as the impact of health and safety legislation relating to at-work driving begins to take effect.
Alison Chapman, head of automotive tax at Deloitte, said: “In the future, the company car will not be confined to the scrap yard. The Government has made it clear that it wants the company car to remain a key part of the corporate landscape as it steers businesses and drivers towards choosing the most environmentally-friendly vehicles available.”
“The future of the company car will be determined by a wide range of factors, including congestion charging, fuel prices (particularly a widening of the difference in petrol and diesel pump prices favouring the former), vehicle funding and vehicle taxation, as well as safety and environmental measures and a greater focus on work/life balances by employees.
“Flexibility in the provision of corporate transport solutions has become crucial to both companies and their employees, but both parties have frequently failed to analyse in detail the full implications of opting out or staying loyal to the company car.
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By GlobalData“This is because the issue is far from a straightforward ‘in’ or ‘out’ decision. Too many companies have tried to treat the choice as an either or option, and as a consequence have paid the price in terms of rocketing costs, administration overload and disgruntled employees.”
David Rawlings, senior manager for automotive tax, at Deloitte, added: “Successful management of vehicle funding to the satisfaction of both employers and employees – who have different and often conflicting requirements – is undoubtedly more of an art than a science.”
Copies of the Deloitte report ‘Goodbye Company Car?’ are available at £225 from http://www.cartax.co.uk/
