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Tax fails to dent company car popularity, finds survey

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Last year’s changes to the company car tax regulations has had little effect on the popularity of the company car, according to a recent survey.

In fact, the company car appears to be becoming even more popular, according to research by Employee Benefits magazine and lease car specialists Alphabet, which finds that nearly 60 per cent of companies believe company cars are essential to their recruitment and retention policies compared to half of respondents surveyed two years ago.

In response to the tax changes last year, just five per cent of respondents had axed their company fleet, with a further 39 per cent informing their employees of the changes. However, nearly a fifth of respondents didn’t bother to tell staff about the new changes. Although 40 per cent of respondents said the effect of the new tax on mileage was minimal, respondents also noted a definite rise in the number of employees expressing an interest in low-CO2 or diesel cars.

Flexibility is also becoming a more important factor, with more firms offering alternatives to company car packages to give staff more choice. The survey also identified a definite trend towards making a range of car makes available to staff as part of a company car fleet.

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