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24/07/2008
Shades of Grey
The ‘grey fleet’, where employees use their own personal cars for business journeys, is a widespread and continuing issue...
Even though much has been written about the costs and risks associated with this issue, many organisations continue to allow their staff to drive for work in their own cars without any control factors in place.
In the past there was a perception that the company car was not a cost-effective perk, so some employees who had to drive for business preferred to use their own cars and claim back the cost on expenses through Approved Mileage Allowance Payments (AMAPs).
These reimbursements were perceived by many as a way to make money; employees could take some extra business trips and pocket the AMAP payments. In addition, some private and public sector employers saw it as a way to reduce the admin and hassle of managing a company car scheme; some might still think of it that way.
Now the situation has changed completely, an employer’s duty of care responsibilities to at-work drivers mean that it can no longer afford to have people motoring around in cars over which it has no control.
Organisations are legally liable for the safety of any driving employee, even one in a personal vehicle.
So if Ms Jones had an accident behind the wheel of her own car, the condition of the vehicle was at fault and she was on a business trip at the time, her company could face fines and even criminal prosecution.
The train disaster at Hatfield showed how seriously the courts are taking the issue of corporate liability.
At the same time, manufacturers have responded to the new tax system by introducing cleaner cars with low-emission diesel engines. The tax burden for an employee in a new BMW or Mercedes is much lower than most would think and a driver in a modern hatchback or mid-range saloon may now pay less tax than they would have done under the old system.
Organisations that continue to pay out mileage reimbursement to staff in personal cars are often losing out financially as well. For example, if a company is to offer a driver the maximum payment of 40 pence per mile for business trips carried out in private cars, over the course of a three year contract, the cost could be higher than providing him or her with a company car for the same period. While for those who only drive on ad hoc occasions, a rental car could be a cheaper as well as safer option.
So, the rationale for allowing employees to use their own cars for work has changed. Any organisation that does so believing that it is cheaper or easier may be setting itself up for disaster further down the line.
The grey fleet must be allowed to fade away.
For more information on how we can help you manage and reduce your grey fleet, please contact the Account Management Team on 01903 858300.
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