Arval: a calculated approach

Date: 20 August 2014   |   Author:

Marchment points to some London-based firms that give a cash allowance because their staff all travel by public transport, negating the perk benefit of a company car. It also dovetails with Arval's recent new focus on cash allowances versus company cars, using Deloitte's whole-life cost module to look at the level at which the cash allowance should be set.

"With the cash allowance, 40% tax and 2% National Insurance mean £500 is only worth £290, and then you have to add servicing, insurance, road tax etc., so that £290 is easily eroded down to £150," Marchment explains. "We see our role as education. Lots of cash schemes were put in place a few years ago and the amounts need to be reviewed."

He claims that changing drivers' cash allowance is in a box marked "too difficult" because the amounts are written into employees' terms and conditions.

"We've tried to deal with the whole spectrum of grey fleet and company cars - we've only recently put the two together. With cash allowance, are you aware you need to check insurance, business insurance, tax, MoT, servicing, and have you got the right policies in place to mitigate these risks?" says Marchment. "Plus, is it portraying the right company image?"

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