Alastair Kendrick: The effect of Covid-19 on staff travel schemes

Alastair Kendrick: The effect of Covid-19 on staff travel

We have seen, over a number of years, employers challenged to move towards a greener approach to business. This challenge included the question of whether this could incorporate a change to staff travel.

These discussions questioned whether there was the opportunity to avoid a physical journey by taking a conference or video call instead. These calls seem to have fallen on deaf ears in some quarters with those who still felt it was essential to continue to insist on a face-to-face meeting. Well, Covid-19 (Coronavirus) has made employers sit up and start to change how they operate and ironically adopt some of the practices which had been floated in the debates discussed above.

It will be interesting to see whether when business returns to normal post-pandemic, whenever that is likely to be the case, if we see employers revert to their old practices or embrace many of these new policies going forward. I suspect we will see the changes continuing and embodied in the travel policies of many businesses across the UK. There are very positive vibes about how they have worked to date.

So, the change will be to limit the need for face-to-face contact with suppliers, customers or clients and to embrace the technology for the online meeting. On this note, we are going to see the impact of this and I guess many employers will look at the staffing numbers they need in this changed way of working and then the benefits they provide.

We are already seeing noises around whether there needs to be a review of the provision of company cars provided to employees in many organisations. If those employees qualified for a company car by reason of a business need rather than their status in the business, do they still qualify now? Many employers, in their policy, consider a business need to mean business mileage covered in a year of something between 6,000 to 10,000 miles. It is unlikely that the business case will be met by many employees in this new world.

There is some pressure in this regard from employees who, throughout the Coronavirus pandemic, have still been paying their benefit-in-kind tax on the company car and have not really had the opportunity to enjoy the benefit. These employees feel out of pocket given the level of tax they have paid to have a company car. It is my view that given the sharp reduction in the levels of business mileage covered by employees and those who feel they no longer need a company car that we will see a steep decline in the company car population. I suspect that there will be an upsurge in employees who are allowed to opt-out of a company car and instead take a cash alternative.

Additionally, depending on the employer, if they had extensive levels of business travel before Coronavirus, they may have had arrangements in place with third-party travel businesses that would facilitate flights and hotel accommodation for employees. Given the drop in travel, will employers want to continue with these arrangements? Or will we see more discretion left at the feet of the employee to make their own travel arrangements with a budget set for what they can spend?

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It is too early to predict whether I am right in my views but whatever I think, many employers will be looking at cost savings and this is an area they would consider worthy of review.

Alastair Kendrick is a director at MHA Macintyre Hudson.