• The cost of free fuel

Providing free fuel for the private use of staff is expensive for the employer and damaging to the environment because employees may use the car more, and it allows employees to live further away from work without incurring extra travel costs. Companies giving free fuel are also meeting all the costs of the resultant extra private mileage, like repairs and accidents, and generally increased wear and tear.

You might like to review your provision of free fuel and make staff aware of the cost of private mileage, both in terms of overheads and environmental damage. Senior management often benefit most from free fuel and this can present a reluctance to change, so you might want to begin with modifying the policy for new employees.

Ensure that any travel remuneration policies your company employs, like petrol or mileage allowances, do not encourage staff to drive extra, unnecessary miles, or put those driving inefficient vehicles at an advantage.

See Fuel Management for advice on monitoring fuel consumption and mileage.

Company car alternatives

Companies are increasingly finding that not every member of staff needs, or even wants, a company car, and would prefer instead to have other employee benefits such as pension provision, profit share and private health insurance. You might like to consider other alternatives like public transport subsidies, allowing staff to work from home or increased leave. Ensure that each benefit is adequately costed and monitored and that benefits are properly structured to avoid unexpected additional tax liabilities. Of course, you should ensure the new scheme does not have a negative environmental impact.

If you provide status cars rather than strictly business needs cars, try and find creative ways of conferring corporate esteem on your employees to encourage the take up of any alternative benefits you propose. It is probably much harder to take away a status car than not to give one in the first place, so think about phasing out the scheme for new recruits.