Many companies provide vehicles for their employees as part of the package of employment benefits. The cars may come in a range of models and on different terms - for instance, the employee may lease the vehicle from the workplace. Business cars are taxed as a benefit in kind, meaning that income tax is payable. It's possible to claim capital allowance on the vehicles bought and used in the workplace. This means you can deduct part of the value from your profits before you pay the tax.
Driving a company car allows employees to forego using their personal vehicles and save money; it offers comfort, speed, and mobility, so they can better carry out their work-related tasks.
As a rule, UK roads are safe to drive compared to the rest of Europe. However, motor vehicle accidents still happen. Many of these incidents take place during the workday or the commute to and from work.
The employer is legally required to pay for the damages or injuries the employee has caused as a result of a work-related activity. You're accountable for your employee's negligent acts or omissions during the course of their employment. In other words, providing business cars can create considerable risk.
Employers have a duty of care towards their employees
Employers are responsible for managing health and safety risks in their businesses. Not only are you required to protect the health, safety, and well-being of your employees, but also other people who might be affected by their work activities. In the case of an accident involving a company vehicle, the car crash is, at least in part, the result of the employer's failure to carry out their duty of care. The duty of care is non-delegable, so it can't be discharged. You must assess the potential risk of injury or harm and the cost of implementing safety precautions. If you've breached this duty of care, leading to a motor vehicle crash and resulting injuries, you can be held liable.
If the car crash was the employee's fault, they have legal responsibility for their negligent acts or omissions. The driver could be held liable if they're not properly licensed or insured, were driving dangerously, or refused to follow through with the imposed driving policies.
Even if a lawsuit isn't generally the first option after a motor vehicle crash, the other driver involved in the accident might sue for damages. Mediation and other forms of settling conflicts are worthwhile, yet taking a dispute to a court of law is sometimes the most effective solution for the victim.
A lawsuit, in all its forms, can negatively affect the company's bottom line
Since the victim can't sue the employee personally, you're liable for an employee's reckless acts because they were performing your work duties. A lawsuit can be devastating financially, affecting your company if you lose out on future investments and sales go down. You might need to sell or close your business.
The trust and confidence of consumers and partners can also decline, having a profound effect on the bottom line. Ideally, the conflict should be solved without resorting to litigation because a lawsuit can be a drain on finances, time, energy, and resources. Remember that even the illusion of guilt on your part is enough to damage your reputation.
How to reduce the risks to your business vehicles and protect your employees
For any organisation with staff that drive for work, ignoring safety can be expensive. Not only is an accident devastating for those involved, but it also brings about financial, reputational, and legal implications. When it comes to the protection of your business vehicles and the safety of employees, the cost associated with implementing safety precautions is nothing compared to the costs of a motor vehicle crash to your company.
Set up a safe driving program for all workers
By implementing a safe driving program, you can enhance employee and public safety. If necessary, the program will change driver attitudes, improve behaviour, and build the skills needed for a "be safe" culture. As you already know, employees are an organisation's most valuable assets. A safe driving program makes sense because it helps you foster good relationships between you and your employees, demonstrating you care.
Depending on the size of your company, you may need to access all the data to set up a safe driving program. You will need to work with your human resource manager, safety manager, accountant, and medical/motor vehicle insurance representatives to gather the information.
Have zero tolerance for intoxicants and stimulants
Drinking or using drugs at work is unacceptable, but it doesn't stop people from doing it. Stressors from outside of work could be driving employees to use intoxicating substances. It's a huge risk to your small business. Alcohol, cannabis, and other drugs impair alertness and reduce motor coordination, so you must have a zero tolerance policy for intoxicants and stimulants. Employment should be terminated if an employee is found to have used alcohol or drugs during work hours and even before clocking in. If you employ a zero-tolerance policy, communicate the details of the policy to staff members clearly and frequently so they understand their limitations, rights, and responsibilities.
Limit the non-business use of vehicles
If a company car is used for any purpose that can't be verified as being for business, it's considered personal use. Any request for personal use of the business vehicles should be made in writing to management, explaining the nature of each personal use. Personal use includes running errands.
The decision to allow personal use should be made based on past driver performance and anticipated usage. Unauthorised people should be prohibited from travelling in company vehicles. The policy must also include requirements for qualifying for a business car and possible disciplinary action for misuse and failing to meet expectations.
Conclusion
Purchasing company vehicles can be a significant investment for any business. One of the hazards of employees using vehicles during their work is a possible liability. Do everything within your means to limit risk and keep the business running smoothly.
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