The concept behind traditional company fleets is simple, a business will buy or lease cars and/or vans with the intent of either hiring someone to drive it as a key part of the business (such as with delivery companies) or give to an employee to make their job easier (such as with salespeople). However, if your employees own their own vehicles and are using them for business purposes, things get a little more complicated.
“When people use their own vehicle for business purposes, that’s called a ‘grey fleet,’ explains Martin Duddridge, Director of Ideal Autolease. “This is usually when people don’t drive enough to warrant having a company car or because it’s not cost-effective for either party or, maybe just because the business doesn’t want to operate with company vehicles.”
Not a grey area
While small business owners may not be fully aware of their obligations when it comes to asking their staff to use their personal cars for business use, in the eyes of the law, grey fleets are far from a grey area.
Companies often go wrong by thinking: ‘We don’t need to worry about fleet management because our staff use their own cars.’
“But as far as health & safety, risk, compliance, and everything else, a grey fleet car is a company car,” Martin explains. “For instance, imagine your employee drives to a meeting in their own car and has an accident on the motorway that leaves someone injured. Now let’s say the police turn up and your employee is deemed to have caused that injury because their tyres are bald and they didn’t have an MOT – your business is just as liable as your employee is.”
The benefits of compliance
As well as ensuring you and your business are covered in the event of an accident, there are some perks to ensuring grey fleet vehicles are fully compliant.
“When people use their own car, in business, they can charge the business up to 45p per mile, which is tax-free for the individual and the business,” explains Martin. “So if you’re doing 10,000 miles a year for business, you’d get £4,500 back from the business, tax-free to cover your fuel, insurance, depreciation, and all the bits and pieces.”
To ensure your company’s grey fleet is fully compliant with legal requirements, or to seek advice on how to optimise your fleet management, call Martin on 0330 332 6136 or email firstname.lastname@example.org.