There are a number of benefits to letting drivers use company vans for personal journeys. But then, doing so can create additional costs, risks, and admin tasks for fleet managers.
So in this post we’ll discuss the pros and cons of letting drivers use company vans for personal use, so you can decide on a policy that works best for your fleet.
For more information on how we can help you and your fleet, get in touch with us on 020 8290 9099 or email us at commercial.motor@anthonyjones.com.
Benefits of Drivers Using Company Vans For Personal Journeys
Your employees will no doubt appreciate the freedom and flexibility of using company vans for personal journeys. This can lead to:
- Greater job satisfaction and improved relationships between staff and managers. People recognise how valuable a perk it is to use company vans outside of work, so this could also help with recruitment and staff retention.
- Employees may take greater care of vehicles that they use both at work, and outside of work. They may consciously choose to keep the van as clean and tidy as possible at all times. This can cut down on wear and tear, which could improve the overall lifespan of the vehicle.
- Every journey could lead to a fresh enquiry if your company logo and contact details are printing on the van.
Finally, if the van is fully electric, then you won’t have to pay any taxable benefit-in-kind charge, and you’ll also save on taxable fuel benefit charges.
The Risks of Allowing Drivers to Use Company Vans For Personal Journeys
If an employee drives a company van in their own time, then:
- The van will have a much greater mileage than it would if it were only driven during work hours. This may result in higher servicing and maintenance costs in the long-term.
- You may face a number of additional administrative tasks, along with associated costs.
- If an employee’s involved in an accident or an altercation while driving the van with your logo on for a personal journey, then it could lead to significant reputational damages for your company.
In terms of additional costs and tasks, if the van is a petrol or diesel model, then you may face a number of additional administrative tasks, along with associated costs. This could include Class 1A National Insurance payments on the van, as it will technically count as a benefit. You may also have to pay a tax on the employee’s private fuel entitlement.
You’ll have to complete P11D forms to report these taxable benefits and expenses, and you’ll need to devise a system for tracking each employee’s mileage and fuel allowances.
Driving Company Vans For Personal Journeys – Insurance Implications
It’s also important to consider that letting your employees drive company vans for personal journeys will definitely affect your commercial vehicle insurance.
Insurers will consider the extra mileage, and the additional risks that may arise from driving a vehicle for personal reasons. They may also consider the possibility that employees may let other people drive the van outside of work, such as friends of relatives.
All of this could result in higher insurance premiums, along with more a more complex claims process in the event of an accident.
Should You Let Employees Drive Company Vans For Personal Use?
As we mentioned above, letting employees drive company vans for personal use can be a very attractive perk of the job, which can lead to a range of benefits for your drivers and your overall fleet. You might decide that the pros outweigh the cons.
However, given the risks associated with allowing drivers to use company vans for personal journeys, you’ll need to design and implement clear policies and procedures so that employees know exactly where they stand.
Set some boundaries around mileage, hours of use, and about what employees can and cannot store in the van. Also set some guidelines on what sort of condition you expect the vans to be in when they’re on the road. They should be clean and free of dents, bumps, and scratches, and they should always be cleared of any personal items when the employee’s driving for work purposes.
If you do choose to ban employees from using their vans for personal journeys, then you’ll also need a clear policy. You should list examples of “private journeys” to help employees understand what is and is not allowed. And you should also outline the possible consequences of policy breaches. This could include additional personal tax charges, disciplinary action, and even dismissal.
Fleet Risk Management and Commercial Fleet Insurance
John Donaghy, Senior Manager, Commercial Motor and Fleet Risks at Anthony Jones says:
“Letting your employees drive company vans outside of work can be a controversial topic, and it’s understandable that some businesses decide to impose blanket bans.
“But regardless of whether you decide to let your employees drive company vans for personal use, onboard telematics and fleet management software can make a huge difference. You can use the insights to demonstrate to HMRC how you’re compliant with BIK regulations. And you can also use your vehicle data to evidence your risk management procedures to your insurers. This can help you make savings on the cost of cover.”
For more information on how we can help you and your fleet, get in touch with us on 020 8290 9099 or email us at commercial.motor@anthonyjones.com.
