Post lockdown travel: the ticking time bomb of Grey Fleet

Wednesday, August 5, 2020 - 07:20
Comments off

With working from home set to be the new-norm for the foreseeable future, Venson Automotive Solutions is putting the spotlight on employee contracts for the benefit of fleet managers.  If the place of work clause in an employee contract changes to home working, businesses have a legal obligation to ensure that staff owned vehicles used for work related travel are properly maintained and legally compliant.

Grey FleetAccording to the latest government figures, car traffic has resumed to between 80% and 95% of pre-pandemic level, however, the national rail network is reporting that passenger capacity is only back to around 16%*.  A reluctance by many to use public transport when they do need to go to the office, could see a car journey being classified as business travel, not a commute.

Simon Staton, Client Management Director of Venson Automotive Solutions explains; “Employers have a duty under the Health and Safety at Work Act 1974 to ensure, so far as is reasonably practicable, the health, safety and welfare at work of their employees.  Where employers allow own vehicle use, it is important that processes are in place to manage aspects such as driver licence checking, insurance validity, vehicle condition and mileage audit.

“Businesses and fleet managers, therefore, need to review their Driving for Work policies in the post-lockdown era, as well as looking at offering vehicle ownership schemes such as salary sacrifice which benefit both the employee and the employer. The key benefits of salary sacrifice include fixed all-inclusive monthly costs, National Insurance savings, ‘hassle-free’ acquisition, no credit check requirement, no deposit needed and fleet discounts and for some organisations a beneficial VAT position reflected in monthly costs.

Additionally, grey fleet vehicles are generally older than company owned cars and are known to contribute the bulk of the road transport CO₂ emissions in some organisations. In fact, data from British Vehicle Rental & Leasing Association (BVRLA) suggests the average grey fleet car emits 19% more CO₂ than the average company car.

Salary sacrifice schemes that incorporate ‘plug-in’ cars can be an attractive proposition for employees because of the large difference in tax on salary (depending whether a lower or higher rate taxpayer) and company cars.  Employees could make substantial savings over a retail deal for pure electric vehicles and the implementation of such an arrangement supports the ‘green’ agenda for businesses.

Simon Staton concludes; “With the government investing in greener transport solutions and offering financial benefits to entice people to ditch older cars for greener alternatives, this is a great time for businesses to research their options.”


Comments are closed.