Employee use of company vehicle agreement in the UK: What you need to know

When it comes to providing company vehicles to employees, it is important for employers to establish a clear agreement outlining the terms of the use of the vehicle. Whether it is a company car, van, or truck, the use of the vehicle is subject to various laws and regulations in the UK. Here`s what you need to know about employee use of company vehicles in the UK.

Defining the terms of the agreement

An employee use of company vehicle agreement is a legal document that outlines the terms and conditions of the use of the vehicle. It is important for the agreement to clearly define the responsibilities of both the employer and employee regarding the vehicle. This includes the purpose of the vehicle, the conditions under which it can be used, and any restrictions or limitations that apply.

The agreement should also specify the period of time during which the vehicle will be provided to the employee, as well as the conditions under which the agreement can be terminated. Additionally, the agreement should define the consequences of any damages or accidents that may occur while the vehicle is being used.

The agreement must comply with UK laws and regulations, as well as any applicable company policies. Employers should seek legal advice to ensure that the agreement is legally binding and enforceable.

Insurance and taxation

Employers are responsible for ensuring that the company vehicle is properly insured and taxed. The insurance policy should cover the vehicle and any passengers in the event of an accident. Employers must also ensure that the vehicle is taxed and has a valid MOT certificate.

In addition, employees who use the company vehicle for personal use are subject to taxation under the Benefit-in-Kind (BIK) scheme. The employee is taxed based on the value of the vehicle as well as its CO2 emissions. Employers must report the employee`s usage of the vehicle to HM Revenue and Customs.

Safety and maintenance

Employers have a duty of care to provide a safe working environment for their employees. This includes ensuring that the company vehicle is properly maintained and safe to operate. Employers must also provide adequate training to employees on how to operate the vehicle safely.

Employees have a responsibility to report any defects or issues with the vehicle promptly to their employer. They must also adhere to any safety guidelines and regulations when using the vehicle.

Conclusion

Providing company vehicles to employees can be a valuable employee benefit and can also improve business operations. However, it is important for employers to establish a clear agreement outlining the terms and conditions of the use of the vehicle. This includes defining the purpose and conditions of use, complying with UK laws and regulations, ensuring proper insurance and taxation, and promoting safety and maintenance of the vehicle. With a clear agreement in place, both employers and employees can benefit from the use of a company vehicle.