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Company Car Supplement: A quick guide

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20th May 2005
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Traffic AccountingWEB's Company Car supplement is designed to help decision-makers in the £40bn company car and van industry make the right choices.

This series of articles includes expert analysis and comment on some key issues for fleet managers including taxation, employment law, corporate responsibility and the environment.

The Supplement has been compiled in conjunction with HRZone. It is not exhaustive and is for general guidance only.

For the latest company car news and comment see AccountingWEB's Company Car Zone.
Document Downloads

Health and Safety Guide to Vehicle Legislation from Hitachi Capital
It's a fact many organisations in the UK don't place enough
emphasis on the health and safety of people who drive vehicles on behalf of their organisation, this can lead to companies falling foul of the law. This manual provides a simple guide for managers working with their organisation's drivers.
Download it here.

Taxation
HM Revenue and Customs provides some useful guidance on its website, including:

General guidance and comment on the tax implications of various arrangements for employee travel is offered by:

Do you have a tax question? Post a question in AccountingWEB's Any Answers. See the latest company car related queries in the Company Car Zone.

Employment law
Snowy RoadThe provision of a company car or cash alternative should be stipulated as a written term of the contract of employment.

The Chartered Institute of Personnel and Development (CIPD) has recommended that the following elements be included:

  • what type of vehicle the employee is entitled to
  • whether it is available for private use and whether there are restrictions on its use
  • who is allowed to drive the car
  • when it will be replaced (typically based on age or mileage)
  • who is responsible for the cost of fuel, maintenance, tax, insurance and repairs
  • whether the car user is required to make a contribution in return for private use of the car
  • whether there are circumstances (such as extended leave or during a driving ban) when the vehicle may be withdrawn, and
  • the car user's responsibilities in respect of the vehicle.

In Legal view: Company cars - benefit or burden? Alison Wallace, head of employment practice at solicitors Steptoe and Johnson, considers what an employer's car policy should include; liability for accidents; and how to phase out company car provision legally.

Corporate responsibility
Speaking in March, Transport Minister David Jamieson told delegates at a RoSPA road safety congress that too many businesses ignore what might happen to their employees who were out on the road.

Regardless of the possible impact of legislation such as the forthcoming Corporate Manslaughter Bill, the Health and Safety Executive has pointed out that the benefits of managing work-related road safety far outweigh the costs:

  • fewer days lost due to injury
  • reduced risk of work-related ill health
  • reduced stress and improved morale
  • less need for investigation and paperwork
  • less loss time due to work rescheduling
  • fewer vehicles off the road for repair
  • reduced running costs through better driving standards
  • fewer missed orders and business opportunities so reduced risk of losing the goodwill of customers
  • less chance of key employees being banned from driving, e.g. as a result of points on their licences, and
  • promoting sound health and safety driving practices and a good safety culture at work may well spill over into private driving, which could reduce the chances of staff being injured in an accident outside work.

In Safer driving: Getting up to speed with best practice Malcolm Noyle of Lloyds TSB autolease looks at how a business can protect its workforce.

RoadThe environment
Company car tax is now linked to carbon dioxide emissions. New cars can be checked on the Vehicle Certification Agency's website and details for older vehicles are provided by the Society of Motor Manufacturers and Traders.

The CIPD has recommended that organisations try to support environmentally-friendly obligations by:

  • encouraging the use of greener cars
  • severely limiting the provision of free fuel
  • encouraging the use of video conferencing etc. in order to reduce the amount of travel to business meetings
  • organising and supporting a car sharing system
  • providing a works bus or subsidising park-and-ride tickets
  • giving vouchers or loans to encourage the use of other forms of transport such as bicycles or public transport
  • providing free (or pool) bicycles and safety equipment, and
  • making good provision for cyclists by having secure and convenient bicycle parking areas, and shower and changing facilities for people who cycle to work.

In Fleet Managers: Thinking Green, Nick Bell of the GoodCorporation argues that fleet managers should begin by questioning whether some or all of the cars in the fleet are needed at all.

Other features

Related links

  • AccountingWEB's Company Car Zone
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