Businesses could soon return to providing employees with company cars due to fears of litigation and concerns over the image staff portray in their own vehicles, an HR firm has claimed.

Many firms have switched away from such schemes, preferring instead to offer "cash for cars", where they give employees an allowance to use their own vehicles for work purposes.

But HR firm Jaluch argues that worries over being held responsible for sub-standard vehicles in the event of an accident and a belief that staff are likely to pick cheaper cars which do not convey a good impression could lead to a change.

"Employees given cash to use their own vehicle tend to upgrade less frequently and choose small, cost-efficient cars, which are often less protective in an accident and not always suited for longer journeys," said Helen Clarke, managing director of Jaluch.

"This could also lead to litigation if an employee develops back problems after spending too long in an unsuitable car on company business or suffers an accident in a car with an inadequate crumple zone."