8 August 2011
- From £9.3bn to £8.7bn
- 36% increase in value of private medical care
Employers have cut job perks, like company cars and fuel, for the fifth consecutive year, according to our data.
The value of benefits in kind provided to staff dropped from £9.29 billion to £8.73 billion over the last five years - a decrease of 6%, but a much sharper drop in real terms.
The figure covers all taxable benefits given to staff, such as company cars, private medical care, and cheap loans.
While the overall value of job perks has declined, some benefits, such as private medical and dental treatment, have actually increased.
According to our research the value of company cars given to staff fell by 16% to £3.9billion and the amount employers spent on fuel dropped to £830million – an 8% decrease. However, over the same five year period, spending on private medical and dental care increased to £1.5billion – a rise of 36%.
Roy Maugham, tax partner in our London office, comments: “As expected, employers made further cuts to the amount they spent on staff benefits as they tried to cope with the impact of the recession, but this has to be seen in the context of a long term decline in job perks offered by employers.”
“While slashing their overall spending, employers actually increased the amount they spent on some perks, like private medical and dental care. This is perhaps because of the increase in the number of banking and professional services jobs that this type of benefit is commonly associated with.”
He adds: “The tax burden on the most polluting company cars – which are often the most expensive – has risen dramatically in recent years. This has pushed employers towards offering less expensive, greener models. Some employers will have turned to different benefits altogether, such as private medical insurance, as an alternative to company cars.”
Infomation obtained explains that tax on company cars is linked to CO2 emissions. A petrol car emitting 220 grams of CO2 per km in 2003/04 would be taxed at 26%, compared to 32% in the most recent tax year. For a company car worth £20,000, that is equivalent to an additional £1,200 of taxable value per annum.
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