The Chancellor’s “disastrous” 2024 Budget has been blamed for record levels of company car handbacks from staff made redundant.

The number of returned company cars rose 43% in April after the NI increases took effect

Fleet Evolution, a Midlands-based salary sacrifice and fleet management specialist, said the number of returned electric or hybrid cars rose by 43% last month after National Insurance increases announced in the Autumn Budget took effect.

In the Budget, Chancellor Rachel Reeves increased employer’s National Insurance Contributions (NICs) from 13.8% to 15.0%, lowered the NIC threshold from £9,100 to £5,000 and increased the minimum wage, all from April.

The move was followed by widespread business warnings of job losses and freezes on recruitment.

Fleet Evolution said the number of vehicles returned from staff made redundant are now at their highest level since the business first started trading in 2012, following the 43% rise in April.

“The pigeons are clearly coming home to roost,” said Andrew Leech, founder of Fleet Evolution and head of Mercia Fleet Management.

“It did not take a rocket scientist to realise that far from having no effect on working people, the Budget changes would have a profound effect on recruitment and retention of employees as employers looked to contain cost increases in the light of the changes to National Insurance and the minimum wage.”

But he stressed that client companies of Fleet Evolution forced to make redundancies in this way would not suffer financially from staff handing back cars.

“We are the only salary sacrifice provider in the UK which has a no-quibble returns policy and provide leaver protection on all our vehicles. So staff can hand them back without fear or favour and without burdening their employers with additional costs when they are made redundant,” he explained.

Andrew Leech, founder of Fleet Evolution and head of Mercia Fleet Management

Leech also said the returned cars were very quickly finding second homes.

“We are finding that there is plenty of short-term demand for these returned cars as client companies are less willing to commit to long-term leases due to the degree of economic uncertainty there is at the moment.”

Returned vehicles are also being snapped up quick for the EV subscription service, Subscribe Electric, administered by sister company, Mercia Fleet Management.

“Businesses are realising that one way of mitigating the effect of these increases and exerting greater control over costs is to flexibly introduce electric cars on subscription rather than long-term leases. As such, we are seeking a marked lift-off in the number of cars provided by this service,” said Leech.

Subscribe Electric is available on most makes or models on the market which are provided fully expensed, including all servicing, breakdown, tyres and insurance costs – all that’s needed is vehicle charging, as and when required.

Leech added: “Short-term EVs can be highly attractive from a cost point of view at a time of rising costs for most businesses following the Budget. And because of their zero carbon emissions, they can also play a role in helping businesses meet their corporate sustainability targets at the same time.”