A LEADING benefits consultancy has advised fleet decision-makers to take a flexible approach to company car contracts in the run up to the Budget in March. Buck Consultants has warned that companies which tie drivers into three- and four-year contracts on their company cars could run into human resource and recruitment difficulties.

Employees taking delivery of a new company car today are likely to see a change in the way benefit in kind tax is calculated before their car comes up for renewal, according to Nicholas Bennett, Buck's head of compensation and HR practice.

'The company car driver who has just taken on a new vehicle early in 1998 under the old tax rules has to stay with the consequences of potential tax change for, typicall, four years, before a more tax appropriate vehicle can be selected,' he said. 'It may be that as compensation and benefit advisers we will have to encourage employers to be more flexible on their three- or four-year rule, if tax changes at the executive end of the car market are significant and hard hitting.'

Buck Consultants' newly published 'Company Car Report 1997/98' has revealed an increase in the proportion of fleets allowing drivers to upsize or downsize their cars, or take a cash option, as part of more flexible benefits packages which acknowledge benefit in kind tax.