Going further with company perks?

Company cars or car-leasing schemes are often said to be in decline. However, two-thirds (65%) of employers offer them, while half operate a car allowance scheme, according to research into travel benefits issued today (July 9 2004) by IRS Employment Review, published by LexisNexis.

The research, conducted in March and April 2004, is based on a survey of 209 HR departments. The results are available in the new issue (803) of IRS Employment Review (www.irsemploymentreview.com).

KEY POINTS

The median value of a car allowance is 4,500.

More than 90% of organisations operate mileage allowances for employees who have to travel on business. The most common practice is to follow the Inland Revenue approved rates of 40p per mile for the first 10,000 miles, and 25p thereafter.

One-third (32.5%) of organisations offer employees an interest-free season ticket
loan to help with the cost of travelling to work:

98.5% offer the loan to pay for public transport;

a quarter (26.5%) of respondents allow employees to use the perk to pay for car parking;

fewer than one-tenth of employers (8.8%) cover road and bridge toll payments; and

less than 1% of organisations say that the loan may be taken out to pay congestion charges.

Three in 10 (30.9%) respondent employers limit interest-free loans to employees who have completed a minimum length of service with the organisation. These range from two months to two years.

Seven in 10 (69%) organisations operate subsistence allowances to cover meals and accommodation for employees who spend time away from home while on company business.

IRS Employment Reviewís pay and benefits editor, Sheila Attwood said:

ìIn spite of a general feeling that company car schemes are not in keeping with environmental concerns, the latest IRS research proves that employers are still rewarding their staff with a variation of this particular benefit.

What is clear, too, is that many organisations still grant cars to senior employees as a perk rather than because of any particular business need.

ìBenefits and allowances can contribute a significant boost to basic salary; employers recognise this fact and adopt a flexible approach when finalising their reward packages.î