Will the new tax policy for company cars see the end of the rep's favourite perk? Rachel Barnes investigates
The sales rep, like or loathe, is integral to a company's success, both for chasing leads and as the face of the company. And integral to the success of the rep, and a driving issue foremost in their minds, is their beloved company car.
But as of 6 April, the tax system for company cars will change. Instead of depending on business miles accumulated, tax will be calculated as a percentage of the car price, and will vary according to the amount of carbon dioxide emissions produced by the car. Therefore, smaller cars will have a distinct advantage over larger models.
So, does this mean that the image of the salesman will change too? They may rightly or wrongly be known for driving big fuel-guzzlers, with souped-up engines and massive spoilers to rival their massive commissions. But this is no longer such a good option under the new tax system.
Research by print recruitment company Harrison Scott Associates has revealed that the majority of its candidates were aware of the tax change and this would have a bearing when they next changed cars. Sales reps in London are at a distinct disadvantage with the mileage payment structure, compared to their counterparts elsewhere in the country, as getting from A to B in Greater London takes longer because of the heavy congestion.
Harrison Scott asked two groups of 100 print reps in Greater London questions relating to company cars and car allowances. It revealed a 70:30 split in favour of company cars over allowances. George Thompson, joint managing partner, believes that this figure is unique to London-based print reps who can rely on the capital's transport infrastructure. "Although we haven't done this research in the Midlands or Scotland, my experience would suggest that, outside London, there's still a much higher proportion of company cars compared to allowances. Outside London, you'd be looking at around 90% for company car ownership."
It deemed that despite, as Thompson puts it, the government penalising reps with big engines more and more, the company car is still considered a great perk. The research also identified a top 10 list of the most popular cars for print reps. The VW Golf came out on top, followed by the BMW 3-Series and the Ford Focus. Tenth on the list was the Mercedes C-Class.
It remains to be seen whether the tax change will have an effect on the print reps' image, with smaller, more economical and environmentally friendly cars becoming the choice of the savvy rep.
One of the research groups was also asked about their views on general pricing in the industry. More than half confirmed that prices were lower than this time last year and a third reported that prices remained static. Only 14% said there had been a slight upward movement.
But this upwards movement could only be justified if the printer has made some form of investment, adding value to the proposition. "This not only takes the form of obvious plant investment, but in one example the purchase of a warehouse to offer clients fulfilment. Another was a printer who added direct mail to the offering," says Thompson.
So, added value is a justification for higher prices. And print reps themselves add value to a company. But as to whether a sized-down car will have a negative effect on our much-loved wheeler-dealers, we'll have to wait and see. We know they can still talk the talk, but will they still be walking the walk in a Micra or a Fiesta?