The research found that the plans of Chancellor of the Exchequer Gordon Brown to remove any financial benefit for receiving free fuel for private motoring will fail to deter companies from offering the perk. He announced the tax clampdown in his March Budget, saying the stringent fiscal levy would discourage company car drivers from excessive car use in their leisure time.
The planned increases in fuel scale charges for company provided 'free' fuel will see the perk reach the point where, in 2002, when it will no longer constitute a benefit. But only 7% of companies intend to remove the perk, while 60% said the withdrawal of free fuel, regardless of the growing tax hit, would damage recruitment and staff retention.
Indeed, 42% said that introducing free fuel for private use would actually improve employee retention and recruitment. Interestingly, however, only 8% of companies expect to pay road charges and tolls for staff on private journeys.