ONE of the world's biggest insurers is reporting a swing back into company cars among staff who have taken a cash option and it is predicting the pattern will continue. Marsh Corporate Services has a fleet of 1,400 company cars and 1,200 staff who have taken a cash option in the UK.

But in the past two months, according to group fleet manager Tony Raymond, more drivers have asked about the chance of moving back into a company car than in the past two years. Although the numbers are small, up from two to about eight, he predicts that demand will grow as staff reconsider the benefits of having a company car in the light of the 2002 company car tax changes to a system based on vehicle carbon dioxide emissions.

Under the changes employees who clock up under 18,000 business miles a year are likely to see tax bills fall. He said: 'It is only a gentle shift and it may be a blip, but equally, I do not think many people have realised what the changes to company car tax will do to tax bills for drivers who do not cover high mileages. When drivers need to replace their car, they will realise how much it costs and then may want to move back into a company car, so there will be a gentle shift back to the company car.'

Raymond made his comments at a Fleet Car Round Table event, sponsored by contract hire and fleet management company LeasePlan. Other delegates added that drivers who ran their own cars also had the issue of insurance to deal with, as if they had an accident, their increased insurance premium could account for much of their cash option.

David Hirst, a flexible benefits consultant, said: 'The company car is still a big issue when it comes to recruitment and retention of staff. With the introduction of carbon dioxide-based company car tax, drivers doing low mileages are already paying the maximum rate of tax, so it cannot get any worse. A lot of people will come back.