ARTICLE: Company car benefits for employers
Electrified company car popularity is something that simply can’t be ignored. Triggered by a favourable tax position, a wide selection of models to suit all lifestyles and budgets and reaffirmed by a charging infrastructure that’s constantly improving, electrified company cars can provide a host of additional benefits to business operators.
Significant changes in the company car arena in recent years have seen a convergence of factors providing a scenario where running a car through an employer is highly attractive for both a business and its staff.
The traditional reasons for offering a company car still exist. However, there are also new factors in play as the Government races to electrify transport in the UK.
Lower taxation for electrified company cars has been in place for some time, but the continued expansion of the number and types of electrified cars now offers a vast choice of options to drivers. And even with a volatile energy market, per mile electricity costs are likely to be lower than for petrol and diesel.*
Plus, a much improved national charging network has made EV adoption easier than ever.
*As of May 2022
Recruitment
New cars provided by an employer have always been a popular recruitment tool. It’s easy to see the attraction; a new car every three or four years that’s, serviced and maintained at no extra cost is not to be sniffed at.
In the 2022 Arval Mobility Observatory Barometer, one of the top reasons businesses give for increasing future fleet numbers was HR-related needs, such as talent recruitment and staff retention.
The BVRLA’s latest Company Car Report also listed value for money and the fact that a new car was on offer as the main motivations for employees taking a company car.
With the job market becoming increasingly competitive, decisions can hinge on factors such as the offer of a company car – particularly if the tax position for the driver is attractive, as it is currently for electrified cars.
Salary sacrifice schemes as a whole
With the Government freezing PAYE bands, salary sacrifice can also keep staff in a lower tax band, while adding to their benefits when used to fund an electrified car.
Company car schemes for electrified vehicles as part of a salary sacrifice scheme can also result in a reduction in employer National Insurance Contributions. And structuring a company car policy in this way can potentially save a business money. For a full insight into salary sacrifice, see Arval’s guide to salary sacrifice.
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Reputation
Offering the latest electrified cars on a company car policy has a positive reputational impact on the business both internally and externally.
Internally, company cars boost morale and raise staff loyalty and respect for the business, because a perk car not only has a financial value but also an intangible feel-good value that also helps with employee retention.
Externally, electrified cars can raise the reputation of a business through simply being seen when drivers visit customers or other companies. With significant weight being given to companies that have a positive approach to their environmental impact, this is not to be underestimated.
There’s also the less tangible, but important, impact of employees talking about their electrified car to friends and family and linking the business to a sustainable attitude.
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Sustainability
As an increasing number of businesses look to improve their environmental sustainability, moving to electrified company cars can provide a significant gain in terms of lowering their carbon footprint for transport when coupled to a green source of electricity.
While companies can control their own electricity use and choose renewable suppliers, it’s important to encourage drivers to do the same if they’re recharging at home.
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Convenience
For drivers who run a company car, life for both the employee and the business becomes more convenient.
Having a new, reliable car available at all times means that the commute is simpler, business trips can be carried out without the additional administration of booking public transport or hiring a vehicle, and family life, particularly for those with kids, is also easier.
The Arval Mobility Observatory Barometer showed that 16% of employees list ‘no risk of ownership’ as one the main reasons for keeping a company car and a further 18% say it’s for the ease of motoring. This is backed up by the BVRLA’s data^ which shows that almost 30% of staff eligible for a company car picked one because it was the most straightforward option.
^ BVRLA Company Car Report November 2020
To find out more about electrified company cars and how Arval can help your business adopt a sustainable electrified company car policy, contact us by booking a free consultation or alternatively give us a call on 0345 266 540 (Mon-Fri 9am-5:15pm).
