Grey Fleet, Company car. Car Allowance, Mileage allowance

20.09.18

Grey Fleet – Are your employees using their private vehicles for business use?

There are a number of challenges for businesses with grey fleet and it’s probably never been as important for your business to understand and manage it’s grey fleet.  There are business implications from safeguarding staff and business liability, to cost cutting and maintaining environmental credentials.  Many companies do not have any idea what vehicles their employees are driving or the associated costs.

What is grey fleet?

Grey fleet is simply the term used to describe any vehicles that do not belong to the company, but which are used for business travel. This might include a vehicle purchased via an employee ownership scheme, a privately rented vehicle or a vehicle privately owned by an employee. When they are driven on company business, often in return for a cash allowance or fuel expense, these vehicles then become considered part of the ‘grey fleet’ – and as such fall under the responsibility of the employer.

Statistics

BVRLA reports that grey fleet business miles total 12 billion miles per annum and employers are spending £5.5 billion in mileage claims and allowances.

Grey Fleet Statistics

Duty of Care

When employees are operating on behalf of the organisation, businesses have a responsibility to their employees under the Health and Safety at Work Act (1974).  This includes employees’ use of their own cars for business purposes.  From a legal perspective grey fleet vehicles should be monitored and managed to ensure that employees are travelling as safely as possible.  Plus under the Corporate Manslaughter Act 2007, companies can be prosecuted for the death of drivers resulting from work-related journeys.

The BVRLA research suggest that the average age of a grey fleet vehicle is 8.2 years, these vehicles lack the safety features of newer vehicles which means your employees could be potentially driving unsuitable vehicles.  This results in businesses inadvertently failing to look after employees by not having policies and practices in place to understand grey fleet.

Costs

This is often a murky area for businesses.  If your grey fleet is unaudited you do not know the true financial costs, the environmental impact or health and safety implications.  The BVRLA estimates that the annual cost to business is £5.5 billion in mileage claims and allowances.

Environmental Impact

There are significant changes going on in the vehicle market most notably the ban on sales of new diesel and petrol cars from 2040 and other steps towards more environmentally friendly transport. With grey fleet being older they are often less environmentally friendly.  BVRLA states that grey fleet vehicle emissions average 152g/km of CO2, significantly more than the average lease car with 119g/km.  So if your business is committed to environmental and social responsibility looking at this area of your business is essential.

Phase 2 of the UK Energy Savings Opportunity Scheme (ESOS) has a compliance deadline of 5th December 2019.  This sets out regulations for large companies (typically 250 employees or more) to measure energy consumption.  This includes fuel consumed by their fleets, including grey fleet.

To find out more about managing your grey fleet then click here.

Contact us to find out more or to discuss vehicle leasing for your business – 0800 694 3880

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