Fleet News

Drugs firm chooses cash-for-car scheme

RECENTLY merged pharmaceutical giant GlaxoSmithKline has switched all of its 5,000 eligible company car drivers to a cash allowance and employee car ownership scheme.

Employees have the choice to use their allowance to purchase a car through the car ownership scheme or use their allowance to fund a suitable private car for business use.

GlaxoSmithKline's senior benefits adviser Debbie Attwood said the move not only saves the company money but is also seen as an attractive benefit to existing and new employees.

The structured car ownership programme means staff technically own their cars, thereby avoiding company car tax, while enjoying the support and services traditionally associated with company cars.

Glaxo Wellcome originally operated the employee car ownership scheme (COS), and following the company's merger with Smithkline Beecham, rolled it out to the enlarged group in August 2001.

GlaxoSmithKline used the services of Whitechapel Corporate Services to launch the scheme and communicate the changes to its drivers.

Attwood said communicating the whole process properly and simply to employees was key to implementing a successful car ownership programme.

'I cannot emphasise communication enough. People immediately think that this is complicated but if you address it properly it's not at all complicated,' she said.

With pharmaceutical staff noted within the fleet industry for driving higher performance (and therefore higher emission) cars, along with the disappearance of business mileage tax breaks, Attwood said the new scheme helped to restore the 'benefit' of a corporately-organised car at a time when the appeal of a traditional company car to them was being eroded by the new tax system.

Commenting on drivers' responses to the scheme, she said: 'People are now seeing the true value of COS. It offers extreme flexibility and choice to an individual, and the cars they are bringing into the scheme are marvellous, some have sports cars and we even have a Maserati.'

She said it was vital for companies considering a car ownership scheme to use the services of an expert company in that particular field.

'When setting the scheme up you need a good provider to run things on your behalf and we used Whitechapel to communicate the scheme to our staff, although some presentations were delivered by our UK benefits team. It is vital companies explain the allowances in that communication, I think that's the biggest area that can confuse drivers. Explain it in simple terms.'

The company has imposed just a few restrictions on the type of cars that employees can choose, so that the vehicles are fit for purpose when driven on business.

'Obviously business-use drivers, such as the field force, are expected to buy a suitable car that allows them to do their job,' Attwood said, ' but on the whole we have imposed very few restrictions.'

Attwood said the scheme provides GlaxoSmithKline with a benefit to 'motivate and retain' staff and makes the company attractive to prospective employees.

Employees who choose not to buy a car through COS can take a cash allowance and make their own arrangement for buying and running a 'suitable' car, Attwood said. They have the flexibility of switching to COS at any time, she added.

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