Even though tax systems are getting increasingly more complicated by the day, businesses are still providing company cars to their employees. For instance, just in the UK, around 50% of all new cars are bought by companies and given to employees to use as company vehicles. It is evident that in the past, giving employees a company car to use has been a non-cash benefit of great significance. It offers many benefits from better mobility to better access to the workplace. Having a company car offers value to employees and businesses, so here are all the great advantages of a company car:
They give you more control
Companies have much more control over their employees and various situations when a company car is used. In many cases, it’s possible to see and control what is done with the vehicle during business hours and before and after. It especially provides better control and safety in case your employee needs a special vehicle to get the job done (it’s better than renting). Just like with office maintenance which is huge for first impressions, with a company car, you can also control the first impressions with clients. This still doesn’t remove all the risk, however. You still have to rely on employees’ driving which always poses a risk. But, in many cases, it certainly is better than having employees use their own cars.
They can be used in a salary sacrifice scheme
The salary sacrifice scheme sounds very ominous but it’s actually very harmless and legal. When a business is providing a vehicle to an employee, the employer can reduce their NIC obligations and limit the income tax payments for the employee. Salary sacrifice is very much legal and benefits the business, but often might result in extra expenses for the employee. For instance, a company car can be subjected to taxes (on top of income tax) so it’s not always economical.
They remove transportation issues for staff
In many countries, especially Australia with its great distances between cities, the place of work is located far away from accommodation and public transportation. With an average of 16-kilometer commute, Australians need to rely on personal cars if they want to have a comfortable work-life balance and better satisfaction. With a company car, people can travel into Sydney or any other business hub from all over the area and enjoy much better comfort and punctuality. Having a company car can be a responsibility for the employee, but if they find a reliable tyre shop in Sydney, as well as a trusted mechanic, all employees will be safe and comfortable in their company cars. Businesses can expect better performance and better worker loyalty.
They remove mileage report issues with reimbursements
In many cases, a company car makes perfect sense for your employees, but sometimes it doesn’t. If your company needs to watch the budget, it might be more cost-effective to encourage staff to use their own cars and enjoy mileage reimbursement. This option removes additional costs for employees and reduces liability. However, the problem comes with providing accurate mileage reports. With company cars that are equipped with trackers and various measurements, you can remove the issue of mileage reports and tricky reimbursements.
They provide branding opportunities
Businesses always need new ways to extend their brand to more places and reach more users. With a company car wrapped in the advertisement, the employee driver can reach a lot of people and get the name of your brand out there. A company car also gives you more control over the company image, because it leaves a much better impression with clients for an employee to meet them in a nice company car than their old car at home. The opposite can happen as well. If you’re trying to convey an image of an eco-friendly and approachable brand and an employee drives a huge truck, it won’t work at all.
As you can see, having a company car to offer to employees can result in many benefits for your employees and your business. With a company car, you can always count on your employees being on time and staying loyal to your brand. A car they get to enjoy is also a great motivator to continue working hard. Depending on your circumstances, the value of a company car system can provide great benefits to your business and your employees. If you don’t mind the extra costs of the fleet, feel free to invest in company cars.