John Jory, deputy chief executive of B&CE Benefit Schemes said: "The Government could have better used this money to help people who are unemployed or have been made redundant. Those who will benefit most from the VAT cuts are those who already have money to spend."
But Andrew Cope, chief executive of Zenith Vehicle Contracts believes the VAT cut could be a big issue for employers who offer company cars.
He said: "The new car price will be 2.5% cheaper - saving £16 to £18 per month on some cars - and this will translate to fuel savings as well. The savings can allow employers to manage their fleets more efficiently"
The change is not quite so promising for the pension industry. Rachel Vahey, head of pensions development at Aegon, said: "The government want people to spend, spend, spend and this might put them off saving for their pension!"
Pre-budget report: Mixed opinions of VAT cuts for HR
The Governments announcement this afternoon that VAT is to be cut from 17.5% to 15% from next Monday until 2010 will come as little relief for employers struggling in the downturn.
