Note - this is not linked to company car or cash allowance drivers, purely private grey fleet users.
I am trying to understand the environment here, I had assumed since the Corporate Manslaughter Act (2008) came into force that most organisations had moved away from this practice, certainly in the private sector - I understand the process has been somewhat slower in the public sector, largley due to union pressures and bureaucracy - however I have come across a spate of businesses recently that are still utlising this outdated, expensive and dangerous method of employee travel.
If your organisation is doing so:
- What rate do you pay mileage at?
- Do you have a substantial grey fleet policy? How often is this reviewed/updated?
- Have you carried out cost analysis vs other travel methods?
- For what reason does this practice continue?
I would be really interested to hear the views on this from the accounting world...
Thanks
Mike
Replies (38)
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If you want to advertise, pay SIFT.
Please don't post rubbish like this and bump up old posts.
I think ireallyshouldknowthisbut was referring to your two posts of earlier today. One being as follows;
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Hi sarasirianni,
Appreciate this is an old post but I have only just joined up.
Reimbursing staff business miles in private vehicles (also know as 'Grey Fleet') is a minefield! Not only in fuel rates, VAT reclamation etc. but also duty of care and it's not even the most cost effective way to travel!
I work with many businesses that have managed fantastic cost savings by utilising an alternative option to grey fleet mileage reimbursement, at times this can be upto £100 *per journey*.
This can really add up to a huge saving of the course of a year.
If you would like more info please let me know.
Thanks
Mike
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That was posted on an old post which then arrived at the top of the recent answers list this morning and appears to be a clear advertisement for your services. It also provides the annoying factor that old posts are resurrected as if they were new.
Admittedly your actual post above isn't a direct advertisement but I hope you can now appreciate why the initial response was made.
We are a cynical lot, we HAVE to be with some of the clients we deal with who cannot be let lose with anything sharper than a crayon as one of my learned colleagues says and frankly we see this all the time on here. Post a couple of what look like helpful posts and then bam - in goes the advertising, which appears in the form of the £100 a pop and final line of your ad, I mean, post
1. Mileage is generally paid at £0.45 for the first 10,000 miles and then £0.25 thereafter? Why? It is tax free and considered a perk. Most vehicles will come in between £0.12 and £0.18 per mile in fuel.
2. What the hell is a grey fleet policy? Policies are generally "do business miles, get reimbursed, I say what is or is not a business journey".
3. In most cases travelling by bike, train, hot air balloon or fairy dust are not options; cars are the usual.
4. Because that is how people travel to various destinations and companies do not necessarily always wish to take on the burden of a fixed term lease or HP.
Now I've answered your question I have one for you - what are you selling?
I'm not trying to "sell" - I'm trying to help.
I'm sorry to be "cynical" again, but this is nonsense.
People are telling you what they are doing. You are telling them they are wrong. You are also telling them that the solutions just happen to be the things you do for a living.
So you are not "helping" people out of a sense of altruism. You are running a business and, with this and your other posts, trying to encourage people to use that business. (by both the carrot of alleging cost savings, and the stick of terrible consequences)
You may well get job satisfaction from that business, but unless that means you are willing to dole the service out for free, that is irrelevant.
The problem with that is the very one that is causing people to give you grief.What ever happened to listening to people to see if they can help rather than just disregard and belittle?
If I'm listening to you to see if you can help, then this is a sales pitch. The intention of your posts is clearly to sell us your service. It might be a service that some people could benefit from. It might be a service that saves people money. You are still selling that service on a site whose terms and conditions expressly forbid such activity.
To then talk as if sharing what you do for a living is some altruistic act (you're just trying to help, the money you might get from any subsequent sales is just a happy side effect) pushes it over the top for me.
1. If you compare the running costs of vehicles to the mileage yourself, which is something I do very regularly on behalf of my clients in the interest of tax efficiency, you will find that mileage often trumps the running costs.
AFR is not in point, that is the advisory rate for company owned vehicles.
2. Why will I go to prison? We audit them each year for points and business insurance and part of each claim requires they declare they are adequately insured.
3. All of the other options you mention are very limited and much less efficient for our particular case where my different locations are visited each day in various locales.
4. It is cost and practicality, not just cost. This scheme works.
Another question for you. Why should I risk my revenue stream to try the alternative options?
What savings do you purport to achieve?
How can you assume, without knowing my business, what may or may not work for me?
What can you offer that is as flexible as a car for a salesperson?
You are a salesperson, how do you get around?
I like red ones.
Oh why can't we have a like button (sarcasm).
Oh do tell, I'm dying to know how we can all save 'up to £100 *per journey*'.
£25 + £6 = £31. Not £32.
You've only calculated fuel one way.
I don't agree that 48mpg is a 'convervative' average.
I'm bemused by what you think your market is. The term "grey fleet" suggests a vast number of employees all beetling around racking up business miles. I struggle to believe that employers of such armies are as ignorant as you portray, so are you targeting small employers that might once in a while send someone on a trip and might save a pre-tax tenner if they invested some time and effort?
Suppose I am such an employer. I can do the maths better than you, but are you telling me I can go to prison if I pay my employee 45ppm, but not go to prison if I rent a car for her?
Thanks for clearing that up.
Then I'm not going to prison (at least, not for this); so I'm good, thanks.
That assumes we are stupid. As does your example of someone driving 150 miles or whatever it was to go on a course instead of considering the alternatives, some of which are not necessarily aimed at saving money but may be about staff comfort and respecting their travel wishes/needs!
Oh and on the 'selling' issue - you come across as selling because you are trying from the start to tell everyone how to suck eggs and the way your posts are written they clearly come across as a sales pitch. The forum is for Accountants, but if you really must post then you wouldve been better off just answering the odd question here and there as they are raised to actually help people, build your reputation on here as an expert in your field and take it from there, much as eg our learned VAT and tax experts do. They do not ask questions, post surveys, drag up old posts, use the old sales line of I can tell you how to save a fiver, but instead answer the queries raised and are often saught out offline for additional help.
Why Im wasting my time with this I have no idea.
How many company directors have gone to prison for corporate manslaughter, or even been charged with the offence, because an employee driving their own car for work purposes died or caused someone else to die in a collision?
In my opinion the OP has passed the initiation test - that is, the barrel of gunk dumped on his head without flinching. Congratulations! You can now be abused as part of the gang instead of an outsider.
isn't that why employers ask for insurance docs and mot cert before allowing their 'grey fleet' to do business mileage.
Of course many might not even pay the 45ppm - they may just say to the employee to claim the tax relief but meet the costs themselves. That way its cheaper for the employer - no cost at all to them....damn it I am good - saved the employer all that money....
no I am saying some employers may choose not to make a ppm payment at all - they are not legally required to. (afterall an employee has to meet their own costs for 'ordinary commuting').
But if you are that risk adverse then you would not do anything (owning a business already puts you in a position to be sued/lose your home etc)...one way to solve it...not have a business?!?!
My car's yellow, so this doesn't apply to me.
I did have a grey courtesy car while the yellow one was at the menders, though.