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Venson warns of grey fleet 'time bomb' linked to home working

Date: 04 August 2020   |   Author: Sean Keywood

A potential boom in employees permanently working from home could lead to an explosion in grey fleet responsibilities for fleet managers, according to Venson Automotive Solutions.

It points out that, where previously staff using their own cars to commute to the office would not be classed as grey fleet, this could change if employee contracts are altered to make their homes their primary workplace.

If, following such a change, employees were then still required to visit the office occasionally, those trips would then be classed as business journeys rather than commutes, meaning their vehicles fell under the remit of grey fleet.

That in turn would mean businesses having a legal obligation to ensure the vehicles were properly maintained and legally compliant.

Venson says the risk of this is further increased by a continuing collapse in usage of public transport, with rail passenger capacity for instance still only at 16% compared with pre-lockdown levels.

In contrast, car traffic has already bounced back to between 80% and 95% of where it was before, suggesting employees who need to visit the office now would be far more likely to take the car.

Venson client management director Simon Staton said: "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."

According to Staton, another approach businesses could take is to look at offering vehicle ownership schemes, such as salary sacrifice, which he said could 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," he explained.

Another problem with increased grey fleet use could be the environmental impact, since employee-owned vehicles are generally older than company-owned ones, and according to Venson are known to contribute the bulk of the road transport CO2 emissions in some organisations, with data from the BVRLA suggesting the average grey fleet car emits 19% more CO2 than the average company car.

These environmental concerns are potentially in sharp contrast to salary sacrifice, since Venson says schemes incorporating plug-in cars can be an appealing proposition for employees due to the large difference in tax on salary (depending on whether they are a lower or higher rate taxpayer) and company cars.  

It says employees could make substantial savings over a retail deal for pure EVs, and the implementation of such an arrangement would support businesses' environmental credentials.

Staton added: "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."