nowing when you can claim expenses or tax relief for driving on business is obviously good for your bank balance. But at the same time, getting mileage wrong can be really expensive – firms have been hit with six or seven-figure fines and back taxes after mix-ups over private and business fuel payments to employees.
In these days of short-term contracts and working from home – or wherever there’s a wi-fi signal – it’s getting harder to be sure whether mileage is claimable or not.
TMC have put together this short guide, which they’ve enabled us to share with our members, on when employees generally can or can’t claim expenses or tax relief.
This is a quick overview of the basic principles. It’s not intended as legal or tax advice so, it’s always best to seek legal or tax advice where there are grey areas.
A business mile is one travelled ‘in the performance of your duties’. It’s when you’re driving ‘on the job’ as opposed to driving ‘to the job’. You’re not allowed to claim for any private travel or for most commuting journeys. You can, however, claim for travelling to places where ‘attendance is in the performance of your duties’, such as between your permanent workplace and a satellite office or, in some circumstances, between home and a temporary workplace.
Which brings us to…
For most employees, ordinary commuting is the journey an employee makes most days between their home and permanent workplace.
Contracts of employment must state the location or locations (i.e. addresses) where employees are normally expected to work. This obviously has a are significant bearing on whether your travel between your work location(s) and home counts as ‘ordinary commuting’, although the tax office generally look at the issue in terms of what counts as your ‘regular’ place of work.
By ‘regular’ they mean your attendance for work is frequent, it follows a pattern, and is consistent for all, or almost all, of the period for which you hold that employment. For instance, if you work in your company’s office if three days a week and routinely work at a customer’s premises on the other two, your mileage from home to both places counts as ordinary commuting and so isn’t claimable. If you start work at the same place every day, it’s a regular workplace. The HMRC test here tends to be if the employee spends 40 per cent or more of their working time at that place, then it is the regular place of work irrespective of the office address on the employee’s contract of employment.
It is also important to point out that you can’t turn ordinary commuting, or private mileage, into business mileage simply by doing a bit of work along the way or during the journey, such as stopping to make a phone call or as dropping something off on route.
Some people don’t have a permanent workplace. They might work on projects at different locations for months at a time. Or they might be field-based with no set pattern of visits around their territory. This can get their confusing but HMRC has rules for both situations.
The cost of travel to a temporary workplace can generally be claimed as business mileage and qualifies for tax relief. A temporary workplace is somewhere other than the ‘regular workplace’, where an employee goes ‘to perform a task of limited duration or for a temporary purpose, even where they attend it regularly’.
But there is a further rule that prevents a workplace from being a temporary workplace; where an employee attends it in the course of a period of where continuous work that lasts, or is likely to last, more than 24 months. If the assignment lasts longer, or the role is transferred there permanently, getting to and from work goes back to being ordinary commuting. Of course, to qualify for this rule you have to be in a permanent job that would normally be based somewhere other than the temporary workplace.
If an employee worked one day out of five at a customer’s office for more than 24 months, this would still be classed as a temporary workplace as it takes up less than 40% of their working time.
There are exceptions though and a common sense approach is required. HMRC state that where the journey to a temporary workplace is not where significantly different to the employee’s ordinary commuting journey, no mileage claim/tax deduction is allowed for the journey.
HMRC devotes several pages of its guidance to situations where employees don’t have a single permanent workplace. Here, the permutations of what might and what might not be business mileage really start to multiply.
If, say, your job covers Lancashire and you live in Cumbria, you cannot claim for the cost of reaching the edge of your territory from your home (this is classed as ordinary commuting).
But you can claim for all miles driven on your territory, as well as miles to any other workplaces you’re required to attend outside it.
What if you are, say, an estate agent who works out of five offices in a 20-mile radius of home?
As far as driving between your home and each office goes, you can’t claim mileage because each office counts as a permanent workplace under the rules. Travelling between the offices counts as business mileage though, as do any trips to properties you are selling as you are driving in the performance of duties.
If your employer allows or expects you to work from home some or all of the time, do trips to the company premises then count as commuting or business mileage?
HMRC state the following criteria has to be met for your home to be considered your workplace:
If HMRC agree that home is your place of work, for all, or part of your working week, you may be able to claim business mileage/tax relief when travelling to your place of work. The journeys you can claim are dependent on your regular working patterns. For instance, if an employee works from home Monday – Thursday and works from the office on Friday, their trip to the office on Friday is an ordinary commute, but if you went into the office for a client meeting on one of your home working days, that would count as ‘travelling in performance of your duties’, for a temporary purpose, and for a would be claimable.
Sometimes the route of a business journey takes you past your workplace. Does the part between home and you workplace count as commuting or business mileage? The answer comes down to whether you stop at the office and for how long. If you drive past the office without stopping, the whole journey counts as business miles. If you drop into the office very briefly on the way, say to pick up some papers you need for the meeting, you can still claim for the leg between home and work. But if you carry out ‘substantive work’ while you’re at the office – e.g. you attend a meeting – then the leg between home and work becomes ordinary commuting and you can’t claim f for it.
Of the almost limitless range of circumstances the rules must cover, HMRC say: ‘We recognise that there will be cases where the position is not clear cut’. However, should anyone take this as a cue to try to game the system, they add: ‘Employers and employees should be aware that it is a serious offence to make a false statement or claim to us. … Where that has happened, we
will consider the scope of taking action against employers to recover PAYE or, if appropriate, recovering tax, interest and penalties from the employee.’
Whether you are an employer or an employee, Rule One of business mileage is keep a full record of every journey you know or believe qualifies as record business travel. That should include date, reason for travel, start and finish address or postcode and mileage. Keep a note of any special circumstances, such as unexpected diversions or detours. This isn’t just important for
prompt settlement of fuel and mileage expenses, it’s invaluable for demonstrating compliance with the rules.
And if you are a driver who receives less than the full tax free mileage rates set by HMRC (AMAP rates) for using your own car, you’ll also need a rates) complete mileage log to claim tax relief on the unpaid element of the unpaid available AMAPs at the end of the tax year. This is performed by either
self-assessment or claiming to the HMRC via a P87 form at the end of each tax year.
TMC’s easy to use, award winning, Mileage Capture and Audit service will ensure you are fully compliant on this topic and are well prepared for a HMRC audit. TMC can also help you and your employees with any tax relief claim on the unpaid element of AMAPs. Find out more on their website. Statistically, only 40% of employees are aware of the tax relief!
The above is a very high level skim across the rules. You can find more information on HMRC’s website – EIM32000 – Employment Income Manual – HMRC internal manual – GOV.UK (www.gov.uk)
The AFP is delighted to announce the sponsorship opportunities as part of the AFP Conference 2022. These packages are detailed in the attachment below and can be booked via email.
AFP Sponsorship Packages – Conference
For further details, please don’t hesitate to get in touch with the AFP.
[vc_row type=”in_container” full_screen_row_position=”middle” column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” scene_position=”center” text_color=”dark” text_align=”left” row_border_radius=”none” row_border_radius_applies=”bg” overlay_strength=”0.3″ gradient_direction=”left_to_right” shape_divider_position=”bottom” bg_image_animation=”none”][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_spacing=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_self” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1/1″ tablet_width_inherit=”default” tablet_text_alignment=”default” phone_text_alignment=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid”][vc_column_text]Why has the AFP introduced the Dealer Standard?
Cars and vans are becoming ever more complex and fitted with ever more sophisticated equipment. This means both that the pre-delivery inspection (PDI) and driver handover elements of receiving a new vehicle are becoming ever more critical.
The days when a driver could sit in a vehicle and familiarise themselves with all of its functions in a matter of a couple of minutes are gone. Safety, infotainment and other systems are often wide-ranging and complex, and require detailed and expert explanation.
Also, two other factors have emerged that are of note. Firstly, the pandemic has made safety precautions at handover an issue of concern. Secondly, many drivers are moving into their first electric vehicle (EV) and need to learn how to use it.
For all of these reasons, the AFP Dealer Standard has been introduced.
What does the AFP Dealer Standard include?
The standard consists of extensive checklists covering both PDI and driver handover. They are designed to ensure that the vehicle is delivered in excellent condition and that the driver is treated courteously and provided with an extensive understanding of its functions, especially when it comes to safety.
What does the AFP hope to achieve with the Dealer Standard?
We intend that the AFP Dealer Standard will be adopted voluntarily industrywide by dealers and fleets as a benchmark for vehicle delivery.
How much does the AFP Dealer Standard cost?
For dealer groups of less than 10 showrooms, the annual fee is £299 pa. For dealer groups of 10 or more, the annual fee is £500 pa.
How can I find out more?
If you are a dealer who would like to sign up to the AFP Dealer Standard or a fleet who would like to know which dealers have agreed to comply, please contact [email protected]
The AFP Dealer Standard in detail
PART ONE: Pre-delivery standards
· Regular lead time updates should be provided to either the fleet customer, fleet operator or driver including further information in the event of any delays and the reason for lateness.
· Confirmation should be provided to the customer when the vehicle is in stock, and the delivery date and time formalised.
· Comprehensive vehicle details including the registration and VIN details should be supplied as well as P11D and CO2 follow-ups.
· Telematics devices, if applicable, should be installed prior to delivery.
· A certificate of conformity should be issued with each vehicle and placed in the glove compartment. Further copies should be available for the fleet if required but additional costs may be applied by the manufacturer or dealer. · It is preferable that in-house drivers are utilised for deliveries who are competent and trained in the product they are delivering. If third party drivers are utilised then, as a minimum, the handover must cover main features and safety related items.
· The dealer should offer support and guidance on any follow-up technical queries regarding the vehicle if required by the customer.
PART TWO: Operational handover standards
THE VEHICLE
· The vehicle should be supplied with:
THE DELIVERY DRIVER
· The delivery driver should be of smart appearance and conduct themselves professionally, as well as being able to communicate clearly and adhere to current COVID security guidelines.
· The delivery driver should be aware that vehicles may be tracked and speeding or other offences in the vehicle will be noted and challenged.
· The customer should be contacted by the delivery driver prior to departure or during the journey with an estimated time of arrival.
· There should be no eating, drinking, smoking or vaping within vehicle.
THE HANDOVER
· As a minimum, a handover process is required either physically or virtually and must include basic driving and safety-related controls, as well as Bluetooth, navigation and other key features.
· Dealers should be able to advise the customer if required on where they can obtain support on using a vehicle app. This is particularly important on EVs that have preconditioning, vehicle locking and other features remote which may be essential.
· Safety items should be shown to be present including spare wheel location, repair kit, locking wheel nut location and bonnet release.
· Guidance on refuelling, charging and additives should be provided. For EVs, this should cover charging cables.
· An instruction manual and service book should be provided or otherwise details given on how to access digital manuals found online or through the vehicle infotainment system.
· Inspection condition and handover documents should be provided, either on paper or electronically.
· The vehicle should be thoroughly checked for damage, and the driver given time to evaluate the vehicle and photograph any damage if necessary. A MoDel or alternative PDA unit should be used where possible.
· There should be a formal damage and compliant rectification process that is designed to minimise inconvenience and disappointment.
· Once the vehicle has been signed for, it is accepted that any issues outside of warranty must be dealt with by the driver.
If you have any questions about the AFP Dealer Standard, or would like to know how to apply, please contact [email protected][/vc_column_text][/vc_column][/vc_row]
Welcome to this broad and diverse topic. It ranges from physical to mental health, wellbeing, prevention, detection and of course, advice on each area. Whilst physical health is generally understood by all, mental health can be easily missed or ignored with extremely serious consequences. It is therefore essential that guidance on all areas of health is considered, implemented, and reviewed.
Plan, Do, Check, Act.
Research has shown that work-related stress has an adverse effect for businesses in terms of maintaining business output and performance, staff turnover, attendance, along with business image and reputation.
It is therefore paramount that you understand what you are looking at but also the potential consequences that your business could face should they decide to ignore the problem.
Work-place stress can also adversely affect a person’s behaviour behind the wheel and their ability to drive safely. There is plenty of research that shows a link between driver stress and unsafe driving behaviours – such as poor road positioning and aggression relating to greater speed and road traffic violations. Consideration should also be made to the impact that an individual driver’s behaviour can have on other road users.
In the UK, the increasingly demanding work culture is one of the biggest contributors to stress among the general population. Identifying stress as early as possible is an important part of managing risk amongst your business drivers.
There are other key contributors to stress, such as financial wellbeing, relationship issues, bereavement or the risk of unemployment. All of these have been very much exacerbated by the Covid-19 pandemic – see our Covid-19 supplement for more details.
Mental health is defined as ‘a state of wellbeing in which every individual realises his or her own potential, can cope with the normal stresses of life, can work productively and fruitfully, and is able to make a contribution to his or her community’. (World Health Organisation).
Mental wellbeing can be broken down into these 7 key areas as defined by www.87percent.co.uk (87% are a team of experts in psychology, technology and business that has come together to solve a critical issue that businesses are facing today and the 87% platform has been designed to provide the insights necessary to measure, understand and improve mental wellbeing).
How common are mental health problems?
Symptoms
Anxiety:
Depression:
Stress:
Consequences
Mental Health problems can lead to:
Employers have duties under health and safety law for on-the-road work activities. Section 2 of the Health and Safety at Work Act 1974 requires employers to take appropriate steps to ensure the health and safety of their employees whilst at work. This duty extends to ensuring the health and safety of employees when they are “driving at work” so far as is reasonably practicable.
Employers must also ensure that others are not put at risk by their work-related driving activities.
The Management of Health and Safety at Work Regulations 1999 requires you to manage health and safety effectively. You must carry out an assessment of the risks to the health and safety of your employees, while they are at work, and to other people who may be affected by your organisation’s work activities (Health and Safety Executive).
The 6 key areas for which systems must be in place (see HSE Guidelines):
Additional O Licence
Do drivers of heavy lorries have the appropriate medical certificate? Especially when this is a legal requirement.
Lone workers
The number of lone workers is increasing. HGV drivers are usually lone workers and likely to experience long, unsociable hours, high physical and mental demands, and often long periods of sedentary work.
Training/Coaching
Are your staff properly trained to include understanding the distracting effects of devices used in vehicles?
Are your drivers coached to develop their understanding of how their health and well-being can have an impact on the way they drive?
Be mindful that to move anything forward will require backing from the top within your business.
Getting buy-in from your senior leadership team that driver wellbeing is important can be challenging, especially when new initiatives will have an associated cost. Consider monetising the annual cost of absenteeism, occupational health costs, third party accident claims, own repair costs and staff turnover along with the associated legal and reputational costs. Present this to your business to help obtain their focus and buy-in.
Advantages: a healthy workforce can have a hugely positive impact on their organisation. Healthy staff are more likely to: •
The results of managing driver wellbeing and the mental health of your driver populations can lead to:
Managing driver wellbeing – physical and mental – will help reduce the likelihood of road traffic contraventions (such as speeding), reduce wear and tear and maintenance costs of your vehicles, and reduce the likelihood of vehicle collisions. There are legal and moral reasons to manage driver wellbeing, but financial savings can also be made.
Potential Consequences of not managing wellbeing and mental health.
An unhealthy workplace is usually quite easy to recognise. It can often have:
Employers can help with drivers’ mental health and wellbeing by promoting a culture of openness about mental health. Make it a focus and a priority within your organisations. Ensure top-down awareness and leadership.
Having support and backup from your senior leadership and health and safety teams will allow for you as a Fleet Manager to promote driver wellbeing and good mental health within your own areas of influence and also help to ensure that employee-wide commitments are fully adopted.
Fleet and line management should keep the dialogue open with drivers and have a readily available channel for drivers to express any potential concern that might impact on their driving activities. It needs to be a two-way communication process to demonstrate management are listening and willing to create change if necessary.
The use of technology can also help identify mental health issues. There are many wellbeing phone apps currently available which enable employees’ mental health to be monitored. Telematics technology can also identify any trends or changes in behaviour of drivers behind the wheel. Is there a significant increase in speeding of a driver, or has there been more harsh braking or cornering events detected? Is this a sign of a stressed employee? Perhaps even, a driver has had multiple collisions over a period of time. Is this an indicator of something else going on with that driver?
If one of your drivers has been involved in a vehicle collision, consider the processes you have in place immediately following the incident, and also for the extended period after.
Check that your drivers feel comfortable getting back behind the wheel following an incident and make sure that they feel empowered and encouraged to say that they are not. Also make sure you have measures in place that can allow for a driver to be collected and returned to a place of safety if they do not wish to drive.
Aftercare following an incident is really important. Many organisations undertake post-collision investigations, which look at obvious reasons and contributing factors to why the incident occurred (such as speed, road conditions, mobile phone use etc.). However post-collision and near miss investigations should also include direct questions to understand the drivers stress levels along with their wellbeing and mental health – both as a potential factor in the incident, but also as a consequence of the incident itself. This should be recorded and reviewed through H&S management in the office. Drivers should be given access to emotional support if needed and consider that they may require coaching to help them develop their confidence or reduce anxiety following an incident.
Document how you manage employee health and wellbeing within your H&S policy document, with specific consideration for employees that drive for work. Monitor absence from work due to stress and set targets for improvement. The number of employees that are off work with stress, and the number of work days lost due to stress are useful and easily obtainable measures of the mental health of your organisation and its employees.
Regularly engage with your team members and staff by scheduling regular 1-2-1s. These can be informal and can provide a good opportunity for you to ‘check-in’ with your employees. Include open questions such as “How are you feeling?” or “Is there anything bothering or concerning you at the moment?” as part of the conversation. Make sure these are done using a video call if a face-to-face, 1-2-1 isn’t possible.
Ensure that all staff know who they can go to (not just their line manager) for a confidential chat. Consider qualifying employees as Mental Health First Aiders. Having an Employee Assistance and Education programme, including online resources is also important and can offer personalised specialist assistance to help employees to overcome personal issues.
Physical health and medical conditions
Remember driver wellbeing is a holistic approach which includes; emotional and mental health as well as the physical health of your drivers. Drivers are sometimes unseen in a workplace as they are out on the road and unfortunately it is often harder for drivers to access healthy food and drink options or to exercise and take suitable breaks. Over time this can have a bad impact on the health of your drivers. Promote good physical health and wellbeing amongst your drivers. Some important physical health checks and considerations include:
They should be familiar with the in-cab adjustments (seat, steering wheel, seat belt, head rest etc.) and how to adjust them to ensure an optimum driving position and posture.
Fatigue
Are drivers aware of how dangerous tiredness can be and do they know what to do if they start to feel sleepy?
Stress
Organisations that can help:
Call 116 123 for free
Call Infoline 0300 123 3393
Email [email protected]
Call 0800 58 58 58 – open 5pm-Midnight
Webchat here
Useful Links
Check if a health condition affects your driving:
https://www.gov.uk/health-conditions-and-driving
Telling DVLA about a medical condition:
https://www.gov.uk/driving-medical-conditions
Tackling work-related stress using the Management Standards approach
A step-by-step workbook (HSE)
https://www.hse.gov.uk/pubns/wbk01.html[/vc_column_text][/vc_column][/vc_row]
For some, moving to a Mobility Fleet Solution can seem daunting and confusing. Within most businesses, there are cars (both perk and essential-use cars), other travel costs paid via expenses while airfares and train tickets are generally paid centrally by the business.
Although the word ‘mobility’ is used by different industries, sectors and countries with many different solutions, this short guide is designed to provide a simple roadmap of many possible paths that your business can develop in order to provide your employees with a mobility solution. This could be either an alternative to an employee’s car allowance, full replacement of your fleet & travel schemes or anything in between.
The AFP has already produced a guide to ‘What is Mobility and Mobility Management?’. It would be useful to review this document alongside that guide.
FIRST STEP – Do your homework. Get your data.
As with all good plans & strategies, a business should start to review all their data within their organisation in order to get a relatively good understanding of all their business mobility costs and reasons for travel.
The aim of this exercise is to be able to drill down to an individual employee to see their holistic cost to your company for all their business travel. The immediate costs to consolidate are the leasing costs, including associated costs such as insurance, SMR including car parking, trains, tolls, taxi (inc Uber, Get) and daily rental spend.
The second phase of the data collection is then to review this with all the actual business trips, including reasons for the trips.
Once completed, not only will you have total control and visibility on your business’ mobility spend, you will easily then see some really interesting data around:
High-level analysis can then be carried out about the potential savings that could be unlocked at this stage – do perform a simple cost/benefit analysis.
Any data that is collected, should be able to be viewed and drilled down to the individual’s activity, as this will be helpful when overlaying your Expenses, Travel & Fleet policies with the actual costs incurred.
This analysis alone could provide an immediate return on the investment of collecting the data, highlighting cost leakage from your business that can be remedied by amending your travel and fleet policies accordingly.
SECOND STEP – Internal Engagement.
Any mobility solution that is deployed within your organisation should improve your business’ sustainability, lower CO2, improve employee productivity and well-being (morale), optimise your cost base and, most importantly, fully suit the employee’s needs.
In order to tackle this task, a working group should be set up across functional departments which includes HR & Benefits and Travel & Fleet. It would be worthwhile including some representation from Finance while consideration should be given to having some ‘voice of the employees’ added to the group as well.
It is recommended to launch an employee survey to identify the barriers, capabilities and a wish list of needs for their business and private travel. This should be used to find out the attitudes to the current car and travel schemes in order to ascertain aligned next steps.
The basic role of the working group initially should be to discuss the findings and insights from the data collection & survey but also then move on to how to best deliver a mobility solution to the employees.
The following checklist is a helpful guide to the topics to be discussed, ensuring that everything is ‘put on the table’:
Profiling/Segmentation.
A tip for this topic is to walk in your employee’s shoes.
Employees within our organisation have differing needs and wants from a fleet/mobility scheme. There are various profiles that you can look at in order to see the likely uptake of any mobility solutions you will be providing.
The different types of employee profiles by area are:
Under this segmentation, those employee profiles that would be keener to move to a mobility solution tend to be:
THIRD STEP – THE PLAN.
Now this step is the real challenge – and the question really is: do you wish to change your business organically or fundamentally revolutionise your business’ fleet and travel solutions. There are various ways to add a mobility solution to your business – it could even be sensible to offer this on the region’s ability to be able to service such a solution – i.e. are the products & services available in this area or does the size of the (mega) city make it possible to deploy a mobility solution?
Option One – Simple Offering
This option is really great to just get things started on your road to mobility and can be delivered easily alongside your current fleet & travel programmes before your step up a gear.
Our advice on this starting point is to gradually launch to your employees more flexible options for them to travel. This can include the launch of car clubs, lift-sharing, walking, scooting and cycling as alternative forms of travel instead of always travelling in a car.
The fundamental change here is for your Cash Allowance Policy. Typically, most Cash Allowance Policies within organisations require the employee to own a vehicle of up to a particular age (normally the maximum age is five – eight years old). It would be worth changing this policy to allow an employee not to need to run a permanent car but commit to have use of a fit-for-purpose vehicle for business trips – this could include the use of a 2nd car in the family, renting a car or taking alternate forms of transport at their cost (not yours, as you are still giving the employee a cash allowance).
Of course, from an occupational road risk perspective, the driver still needs to be compliant within your policies for driving (unless there is no car driving at all – and in these cases we would recommend the employee signs a declaration stating they do not drive for business and are excluded from being able to make any mileage claims).
Option Two – Base Offering
This option is a bit more complex to deploy and could be classed as the next stage of your mobility offering if you have implemented option 1, the ‘simple model’.
There is a good argument to rename the Cash Allowance as a Mobility Allowance which can be offered to the employee as an alternative to taking the cash as a Car Allowance – especially when the employee does not wish to even own a vehicle and/or have the associated costs such as parking.
What are we offering in this instance?
A Mobility Allowance will sit alongside a Cash (Car) Allowance scheme. The employee chooses which one they would like based on whether they run a permanent vehicle or not, or where they live and travel to.
In this example, the employee’s Mobility Allowance would initially be set on a level of the current spend on 1) Car Lease + associated running costs or the Cash Allowance level + 2) the annual expected travel spend, including business mileage.
Your business will need to make a decision on:
Spend Monitoring systems will need to be deployed for both the business and employee, in order from them to accurately manage and see their mobility spend.
Option Three – Advanced Offering (All Employee Launch)
This is where the Company Car and Cash Allowance scheme is removed altogether and all employees are moved to a full Mobility Allowance Scheme.
Each employee is given an annual mobility allowance that pays for their car lease (if they have one), their business fuel/charging and all their travel costs.
The employee reviews and manages their own spend via a Mobility Platform which needs to tie together the data of all trips (total costs and mileage) and is visible to the employee. Any booking system can either be a mobility provider or your current Travel Management Company (TMC) combined with your current travel payment solution (T&E card).
A further permutation here is for any Mobility Allowance to be split between travel and fleet if they have a leased car. This way, the employee only has visibility of their travel & T&E spend against their allowance via the expense platform and the leasing cost element is excluded from your Mobility Programme – which might be easier to deploy.
Within this option, it is possible to deploy a limited approach where the Mobility Allowance would only be offered to employees in regions where such a solution will work – for example in a mega city, like London or a developed city, like Coventry (this also applies across the globe too, as you could start in the Netherlands for example).
This will then start with a localised evolution (region by region, country by country, employee type) but always lead in the ‘advanced’ (connected) regions.
That said, be careful to ensure there is still consistency of offering to employees and do not set up a patchwork quilt of suppliers!
The below chart summarises the three options for deployment:
|
SIMPLE |
BASE |
ADVANCED |
|
|
Product |
Launch flexible options – car clubs, liftshare, walking, scooting and cycling as different forms of travel |
Option to swap Car Allowance to Mobility Allowance |
No car allowance, only Mobility Allowance offered to all employees (includes an option for a car) |
|
Policy |
Discourage employees from running a fixed car if taking an allowance |
Run both car & mobility schemes, employee can have either option |
Mobility offering only |
|
Occupational Road risk |
Employee still needs to be compliant for driving unless no travel via a car |
Employee still needs to be compliant for driving unless no travel via a car |
Employee still needs to be compliant for driving unless no travel via a car |
|
IT solution |
N/A |
Optional |
Employee Mobility booking solution for travel would be recommended |
|
Data solution |
Not required |
Integration of vehicle costs (company car) and expenses by employee would be recommended |
Integration of vehicle costs (company car) and expenses by employee would be recommended |
|
Payment solution |
Not required |
Desirable to offer mobility employees with a company payment card for their travel |
Employee needs a company payment mechanism |
|
Who pays? |
Employee takes the full allowance, runs no car but pays all their travel costs themselves |
Optional. Either company or employee claims their out-of-pocket expenses |
Employer pays for all travel and deducts any private costs from salary |
|
Areas to think about |
Allowance levels per month will drive the behaviour you wish to see |
Offer only to employees who live in areas where it will work or for all employees? |
SUMMARY
The move to mobility is not a daunting one. If planned and prepared fully, it can be very straightforward.
Of course, there is a lot of data analysis, employee engagement and internal functional alignment to be done but thereafter, it is very much management.
Our roadmap, as laid out in this document, is a guide of what is possible for fleet and travel managers to deploy. Moving from option 1, through to option 2 and finally to total mobility in option 3 is a sensible deployment plan.
However, each business is different. Employees have differing objectives and each company has differing cultures and reasons for their particular current fleet and travel policies, so one method will never fit all.
All the best with your (mobility) journey!
This document has been created by: The AFP Future Mobility Steering Committee. If you have any questions about this topic or want to know more, please get in touch with [email protected]
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A business journey can be defined as ‘the travel between the one permanent workplace and a temporary workplace‘, or ‘travel between home and a temporary workplace‘, or ‘travel between two temporary workplaces‘.
An employee may change their workplace for a temporary period enabling the journey from home to the workplace to be classed as a ‘business journey’.
However, if an employee attends the same temporary workplace for a period of 24 months or longer, then they are said to be on ‘detached duty’, and their ‘temporary workplace’ will be regarded as their ‘new permanent workplace’.
It is important to note that where an employee is required, because of Covid restrictions, to work at home on some days and at their company’s offices on others, the travel between home and the company’s offices on the days they are required to be there will be ‘ordinary commuting’ and is not classed as a ‘business journey’ from a reimbursement perspective.
The driver, their welfare and the consequences of their actions are the responsibility of their employer whilst they are travelling on business. This still holds true even if they are using their own vehicle.
For example, if an employee is dropping off some work post on the way home then this is technically classed as a business journey and the normal Grey Fleet vehicle requirements apply, i.e. they need to have business-use insurance as they are using their own personal vehicle for a work-related journey.
Think about the culture in your business and challenge ‘old fashioned’ behaviour that ‘celebrates’ doing ridiculously high mileages. High mileage drivers face much higher risks from fatigue. Spending too much time behind the wheel will have an adverse effect on their productivity unless they are a professional driver.
Figure out what you want to measure and where to get the associated data from. For example, if you want to know incident rates by distance travelled, group your drivers by annual mileage bands and analyse the likelihood of incidents against the different bands. The data required to achieve this analysis can typically be obtained from your fleet management system, telematics data or your accident management provider.
Compare and benchmark your data including incident rates with other fleets and more importantly, similar companies within your sector or industry.
Identify your problem areas and what needs to be done to address them. You may need to invest in hardware/systems or third party providers to actually get to the route of the problem i.e. you may know that you are having too many incidents but don’t know why.
Investigate every reported vehicle incident for evidence of higher risk behaviour (such as speeding) and other patterns or commonalities between collisions, i.e. more frequent at a certain time of day, or on a particular road. This information can be collated and analysed to gain visibility of trends and identify where resource may need to be focused. Support to do this may be available from your fleet management system supplier or accident management provider.
Presenting the monetised costs of your incidents will help obtain ‘buy in’ from the relevant stakeholders in your business, allowing you to introduce objectives or new policies/procedures to reduce risk and incidents. If required, it will also help evidence the need for your business to invest in systems, training and suppliers. Obtaining ‘buy-in’ from your business will also make it easier for you to introduce objectives along with robust policies to reduce your incidents and risk going forward.
Telematics data can be used to identify drivers who display adverse driving behaviour such as speeding, harsh braking and accelerating. Through aggregating data, you will have a significantly greater insight into how a driver is performing behind the wheel and work with driver risk management businesses to understand what you need to do to put it right.
Fleet Risk systems or Fleet Management providers can be used to analyse excessive service and maintenance expenditure for evidence of harsher driving styles. For example, more frequent tyre replacements can indicate harsher acceleration and braking. Windscreen chips can indicate tailgating/driving too close to the car in front.
Monitoring business mileages, expense claims and licence endorsements can be achieved by capturing the data within a fleet system, using a third party supplier or doing it manually.
Ideally, you will need systems, processes or third party suppliers to enable:
Identifying drivers who, due to their driving activities, history, knowledge, and situational risk may be at a higher risk when they drive is an important part of managing the business driver journey. This can be done by carrying an individual driver risk assessment, either internally, or using a third party supplier to support. Once you have visibility of the driver risks within your organisation and potential areas of weakness or gaps in knowledge, it can be addressed with:
Set clear guidelines within your policy for acceptable safe driving behaviour, such as:
Make your company obligations clear regarding the duty of care for employees who drive on business along with your corporate social responsibilities and set high expectations for what you expect from your drivers.
Be clear and transparent regarding the importance of having robust fleet policies and why they need to be in place. It’s a lot easier getting compliance from your drivers when they buy into what you are trying to achieve.
Share your statistics and what you want to achieve with your drivers – which is primarily their safety.
Explain to drivers in terms that will resonate to focus their minds, i.e. we need to sell x amount of product to pay for the average incident cost along with the associated time off work.
Make sure that your drivers fully understand your policies and the consequences of non-compliance, i.e. they are encouraged to stay in hotel when their journey exceeds a certain time threshold or what’s likely to happen if you have a policy where drivers can’t drive when then have more than a certain number of endorsement points and a driver exceeds this threshold.
If you have any questions or would like more information about the business journey, please get in touch at [email protected]
Employees, therefore, who use their own vehicles for work-related journeys are called ‘Grey Fleet drivers’ and are still subject to the same duty of care requirements as any other employee with a company-provided vehicle.
Grey Fleet vehicles/drivers typically fall into two distinct categories:
The government has structured the benefit-in-kind taxation for company car drivers to encourage them to choose low emission vehicles which is admirable. This has meant that benefit-in-kind tax on traditional internal combustion engine cars has been extremely penal over recent years (and only since April 2020 have those electing to take electric vehicles had extremely low tax)
This policy, over the last five to ten years (pre-2020), has driven a high number of drivers towards having a cash allowance instead of a company car. Obviously, as these employees receive cash from an employer in lieu of a company car, then it is necessary to have more stringent policies and practices regarding what type of vehicle these drivers use on company business.
Also, Cash Allowance Drivers are typically paid using the government’s advisory fuel rates or the actual cost of the fuel as the depreciation and running costs of having a car are already included within the cash allowance payment. Therefore, the employee is only reimbursed for the fuel cost associated with their business trips. See https://www.gov.uk/guidance/advisory-fuel-rates
2. Occasional Business Travel: those drivers who use their own vehicle for occasional work-related journeys but don’t receive a cash allowance.
Non-cash allowance drivers typically receive a higher mileage reimbursement rate than Cash Allowance drivers to accommodate the depreciation and wear & tear to their own personal vehicle. Some Occasional Business Travel drivers don’t make claim for their journey but the same rules still need to apply. See https://www.gov.uk/government/publications/rates-and-allowances-travel-mileageandfuel-allowances/travel-mileage-and-fuel-rates-and-allowances.
Company Liability
Grey Fleet vehicles are a concern to many organisations as they can be challenging from a visibility and management perspective in terms of meeting basic duty of care responsibilities, not to mention corporate social responsibilities (CSR) in terms of the environment.
Grey Fleet drivers are also a concern as, often, they can be ‘missed’ from any driver compliance or driver risk processes that their employer has in place for formal Company Car drivers.
The common misconception for many employers is that giving drivers cash instead of a company car means that they can wash their hands of any associated liability and responsibility which is completely untrue. Employers have a legal obligation to ensure that Grey Fleet vehicles, and the employees that drive them are safe, fit for purpose and lawfully allowed on the road.
Companies are exposed to prosecution or third-party claims if an employee, driving on company business, is involved in an incident and their vehicle is not in a roadworthy condition or not adequately insured with business-use insurance cover. Many companies fall into the trap of letting their HR department deal with Cash Allowances, however, they typically lack the knowledge and experience of the Fleet Department in ensuring that Grey Fleet vehicles are safe and legal, which can leave them seriously exposed.
The good news is that there is an increasing amount of ultra-low CO2 emissions vehicles becoming available that have very attractive Benefit-In-Kind rates which is now turning the tide on getting Grey Fleet drivers back into company cars. Many responsible organisations are proactively taking steps to encourage cash takers back into company cars and also introducing very attractive car salary sacrifice schemes.
Keep your approach to managing driver risk and compliance consistent i.e. Grey Fleet drivers still need to have their licences checked at the same intervals as all other employees that drive for work. If you have a policy where someone can’t drive a company vehicle if their endorsement points are above a certain threshold, then why would you allow them to drive their own vehicle on company business?
Keep your approach for acceptable Grey Fleet vehicles consistent with your company car policy which is important from a company image, environmental and safety perspective. For example:
Make sure that new starters immediately comply with your policy where possible. However, if you do have Grey Fleet drivers using vehicles on business that fall outside of your approved policy, then formally agree a timescale for them to obtain a vehicle that will comply i.e. when their existing personal contract hire vehicle is returned.
Think about what you want to achieve in terms of keeping drivers in company cars. You are more likely to lose visibility and potentially control of your fleet if you make it more attractive for drivers to take cash allowances over a company car i.e. the cash allowance shouldn’t give employees access to makes and models better than those to which they would be entitled as Company Car drivers. Work with HR to ensure that cash allowances are not being used to provide a ‘back door’ to pay rises at a time of salary freezes, as this will drive people out of taking a company car for the wrong reasons.
Create an easy path for cash allowance drivers to return to your company car scheme. For example, enable eligible Grey Fleet drivers to join/re-join the Company Car scheme without penalty or unnecessary bureaucracy.
Enabling drivers without a cash allowance to use their own vehicle for Occasional Business Travel should be a last resort as it’s more difficult policing compliance for their personal vehicles. Options to use a pool car, a company car, a hire car or take reasonable alternative methods of transport should be exhausted before authorisation to use a private vehicle is permitted.
It is good practice to put an annual upper mileage limit on Occasional Business Travel drivers. Typically, most companies set up an upper limit for acceptable Occasional Business Travel at no more than 1,000 miles per year. More than that, and the employee should be considered for the Company Car or Cash Allowance schemes. Personal vehicle usage should be a last resort and not the norm.
It is good practice to cap the mileage reimbursement rates against the advisory fuel rates for Cash Allowance vehicles. For example, it’s the driver’s choice whether they choose to have a vehicle engine size greater than 2000cc but it shouldn’t be at the expense of your company, not to mention the environment.
Add Grey Fleet vehicles’ insurance, MoT, RFL, safety recalls and service schedules to any software you use to capture and manage your Grey Fleet. This can allow notifications and alerts when renewals are due and to serve as a prompt to check that the driver has undertaken the required action.
Investigate in more detail vehicles that fail their MoT at the first attempt – are they really business roadworthy/appropriate even after the rectification work?
Some fleets have considered extending their corporate fleet insurance policy to cover Cash Allowance vehicles, guaranteeing full business cover. This will be a Benefit-in-Kind for Grey Fleet drivers, but it gives employers full confidence that all employees who drive for business have appropriate cover.
If you have tracking fitted to your company vehicles then consider the objectives that you are trying to achieve which will certainly include safety factors. Typically you lose this control and visibility with Grey Fleet or rental vehicles.
Encourage drivers to have tracking on their vehicles from an insurance cost reduction perspective. There are many driver/vehicle monitoring phone apps available on the market today that give similar functionality and data to traditional black box hardware. These are likely to be more attractive and easier to adopt within your Cash Allowance and Grey Fleet driver populations.
The full cost of running a vehicle, including insurance, tyres, maintenance, scheduled servicing and VED quickly escalates for higher mileage vehicles. This increases the risk of non-roadworthy vehicles being driven as employees may look to avoid necessary SMR expenditure. Consider adding a business mileage threshold for Cash Allowance drivers between 8,000 – 12,000 miles per annum to mitigate this risk.
Some fleets are introducing initiatives such as having a Green Travel/Mobility Allowance which can be taken in place of a cash allowance or company car where one of the following applies:
Having a Green Travel/Mobility Allowance normally excludes:
Employees who receive a car allowance and/or use their personal vehicle for any business travel must provide the following evidence to the Fleet Manager prior to using their vehicle. The provision of this evidence should also be the trigger for the employee to become eligible for receiving a car allowance and mileage reimbursements. Evidence is typically provided at least on an annual basis and/or when there is a change in circumstance, i.e. when the employee has a new vehicle:
The DVSA provides a useful vehicle look-up tool, linked directly to their database, which can be used to provide evidence of an employee’s vehicle MOT and RFL status. This can be used in lieu of a physical MOT test certificate and/or RFL tax confirmation.
Online driving licence checks are the most robust way to validate driving licences and if it’s a non-UK licence, then DVLA paper-based checks will highlight any convictions. Also viewing of non-UK cards is essential to ensure the licence, if EU, was not previously exchanged from a country that we do not recognise for automatic full licence. For example, if someone passes their test in Brazil, moves to Portugal and exchanges their licence for an EU licence, this shouldn’t be recognised as a full licence in the UK.
Carry out random monthly audits to check insurance policies have not changed and still include business cover. If you do not check licences electronically via an automated process, encourage drivers to report any points on their licences.
It is the responsibility of the employee to ensure that their private car is fully compliant with the law, is operated safely and is appropriately maintained in line with the manufacturer’s guidelines, irrespective of the method of funding for the vehicle. Ensure your employees are aware of their own responsibilities in relation to the vehicle they use for work purposes.
It is also the employer’s responsibility, to a lesser extent, as they cause or permit the person to drive the vehicle for business. So, it is imperative that the drivers are aware that they should be undertaking and confirming vehicle checks as well as random spot checks by the company.
If you haven’t got up-to-date information from a Grey Fleet driver, then they should not be able to drive their personal vehicle for business purposes and their Cash Allowance and/or Mileage Reimbursement payments should be suspended.
Claims for business mileage should ONLY be reimbursed once the employee has submitted a valid VAT receipt covering the mileage subject to the claim. This must be dated on, or before (near to) the date of travel. This will enable your business to claim the VAT back on the fuel portion of the mileage expense.
Typically, employees taking the Cash Allowance should not be eligible to use pool cars or hire cars unless they are in a different country, for example, and must generally make their own travel arrangements if their private car is not available.
Be clear and transparent regarding the importance of having robust fleet policies and why they need to be in place. It’s a lot easier getting compliance from drivers when they understand and are bought into what you are trying to achieve. Ensure all your business drivers agree to and sign the company fleet policy – this should be held on file.
Educate your drivers on what constitutes a Grey Fleet vehicle and what constitutes a business journey. Understanding will greatly help compliance and engagement. Make your obligations clear regarding duty of care and corporate social responsibilities (CSR), in terms of the environment.
Share statistics, such as your company’s carbon footprint and your objectives for reducing this.
Make sure that they understand that it’s the employees’ responsibility to ensure that their private car is fully compliant with the law, is operated safely and is appropriately maintained in line with the manufacturer’s guidelines, irrespective of the method of funding the vehicle.
Car Allowances are typically paid as part of an employees’ salary via payroll and is subject to normal statutory deductions, however, it should be made clear to the driver that Car Allowances do not count for pension calculation purposes.
Make it clear that Car Allowance payments are contingent on the employees complying with your policy and non-compliance will result in suspension of payments and mileage reimbursements.
Employees may be able to claim Mileage Tax Relief on their business mileage claims where the mileage rates claimed are less than the Approved Mileage Allowance Payments (AMAP) published by HMRC (https://www.gov.uk/guidance/advisory-fuel-rates). This can be done via a P87 claim form from HMRC or on the employee’s self-assessment tax return, if they complete one. Employees should make their own arrangements with HMRC to claim Mileage Tax Relief and the company has no liability or responsibility whatsoever in this regard.
Explain carefully to employees the full cost of running their own roadworthy vehicle, including insurance, tyres, maintenance, scheduled servicing and VED. Higher mileage drivers (25,000+ total miles per year, business and private) will soon find that service and maintenance costs escalate, increasing the risk of non-roadworthy cars being driven as employees avoid necessary SMR expenditure.
For more information, or if you have any queries relating to this topic, please get in touch [email protected]