John Lewis: Has the death knell sounded for the company car?

The company-provided car has been a hugely popular employee benefit since the 1970s, and there are no signs of this changing.

You only have to look at the new car registration figures from the Society of Motor Manufacturers and Traders to see that the number of cars sold to organisations has increased over the past three years and looks set to carry on rising as the economy pulls out of recession.

However, government statistics show a small decline in the overall number of taxable company cars, which fell to 950,000 in 2010/11, down from 970,000 in 2009/10. So how can these different data trends be reconciled?

These figures are based on benefit-in-kind (BIK) tax claims, and tell us that the company car tax regime is beginning to tax some people out of the private use of their cars. It may be that more people are deciding not to take a perk car or are using company cars only for business.

Others may pay a personal use contribution to their employer instead of paying BIK tax. Driven by their conscience and emissions-based tax incentives, virtually all employers and staff are taking a more sustainable approach to their transport needs, whether by choosing a lower-emission car, driving fewer miles, or taking more trains and buses. Fleet managers and leasing companies recognise these trends and are providing more options, such as corporate car clubs and salary sacrifice arrangements.

So, whether they are looking after their essential users or perk drivers, organisations will continue to play a vital role in promoting cleaner, safer, more affordable mobility.

John Lewis is chief executive at the British Vehicle Rental and Leasing Association