A guide to Driving for Work

30/04/2019

As well as leasing vehicles to private individuals, at Blossom Vehicle Leasing the majority of our customers are corporate clients. They either lease cars or vans to maintain a fleet for their employees, order cars to spec as an employee benefit, or lease with the sole purpose of driving for work.

Some of our customers order many vehicles from us, others may only need one or two. You may own a business where your employees drive their own vehicles for work, or you are an employee who has leased your own vehicle that you occasionally use for business purposes.

Whichever category you fall into, if you yourself or your employees drive for work, there is some useful information you should be aware of...

Business Car Insurance

The big one. Business car insurance. This kicks in when employees are driving their own vehicles anywhere for work - other than their normal commute. Although it is the employee’s responsibility to extend their insurance policy to cover business miles, the employer is expected to share relevant information with their team about business insurance is and why it matters. So here are the facts:

There are 4 different types of business insurance in the UK, the most appropriate depends on the level of travel done for work:

  1. Business class 1 - required if business is not the primary use of the vehicle. For occasional travel to other sites and events
  2. Business class 2 - As above, but covers the main driver and one named person
  3. Business class 3 - needed for someone who uses their car for work most days. Covers more extensive travel and higher mileage
  4. Commercial - covers someone whose car is central to their job, like a taxi driver or driving instructor

Who pays for business vehicle insurance?

There are two options for paying for business insurance. This will differ based on your employer, your contract and the amount you drive for work:

  1. The employee pays for the insurance themselves – recouping the costs through business mileage allowance
  2. The employer pays for business insurance – the employee would need to provide receipts so the employer can claim back the insurance as an expense

If you own a business where you require your employees to drive their own vehicle for work, you must:

  • Advise your employee to tell their insurance company that their vehicle will be used for business
  • Give your employees an accurate estimate of how many miles they’ll be driving
  • Check the excess amount on the insurance policy and establish who is liable to pay it

How much is business insurance?

Depending on your driving experience and your driving record, the cost of business insurance will differ. You can reduce the cost of your premium by:

  • Adding security features such as an alarm or tracker
  • Pay the insurance premium upfront rather than monthly
  • Shop around to get the best deal (take a look at our guide to buying car insurance, it lets you in on the secret of the best time to buy!)
  • Ask about adding your car to the company fleet insurance, this may be an option

Covering vehicle costs

When you expect employees to drive for work, there is usually a reimbursement for business mileage. This tends to be offered by paying an ‘approved mileage rate’.

Approved mileage rates or Approved mileage allowance payments (AMAPs) are recommended amounts businesses should pay employees per mile for work travel, set by HMRC. They are intended to cover fuel, insurance and wear and tear.

Current recommendations (April 2019) are:

Type of vehicleFirst 10,000 milesAbove 10,000 miles
Cars & vans45p (40p before 2011 to 2012)25p
Motorcycles24p24p


If an additional colleague is also travelling in the car, HMRC recommends an additional 5p per mile passenger payment is added (this however is optional).

If mileage payments are less than the AMAP above, employees can claim tax back on the difference between what they were paid and what they would have been paid if the AMAP has been used. This tax can be claimed back using a P87 from HMRC.

Parking

Any costs relating to parking can usually be reclaimed back as a business expense. However any parking fines incurred are the responsibility of the driver.

Put a policy in place

As an employer, it is a good idea to create a company car or driving policy for all staff so that there is a structured format in place to be referred to.

If you have any questions about driving for work, get in touch with the team at Blossom. We deal with enquiries of this nature regularly and will either be able to help or point you in the right direction.

For more information about our leasing vehicles and the options available to you, get in touch with a member of the team on 01242 500060.

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