If you allow your employees to use your company vehicles for personal use or are considering doing so, it’s important for you to make the terms of business and personal use as clear as possible to avoid any confusion about what is and isn’t permitted. This ensures employees have a clear understanding of the rules and can be held responsible if they break them or breach the terms of the company vehicle policy.
Why is it Important to Monitor Personal Mileage?
According to research by Company Bug, business mileage is the greatest single expense for businesses in the UK, with over 2 million employees making mileage claims for a total of 10 billion business miles every year, however, a 2019 study by Flexed found that over 89% of those claims were actually inaccurate, costing companies £1.6 billion every year.
Even worse, a worrying number of 41% of employees believed that there was nothing wrong with over-inflating fuel expenses with 17% admitting to deliberately inflating expenses for their personal gain, even though this constitutes fraud. Through better monitoring of business and personal mileage, you can be sure that your employees are following the terms of the company vehicle policy and not getting away with committing fuel fraud.
How to Set Out the Rules About Personal Mileage with a Company Vehicle Policy
We strongly recommend having a clear and easy to understand company vehicle policy in place that sets out the rules regarding personal mileage.
What Should Your Company Vehicle Policy Address?
At the very least, your company vehicle policy must provide information on the following four questions:
- What is a company vehicle?
- What is deemed business use of a company vehicle?
- What is deemed personal use of a company vehicle (if permitted)?
- What is considered business use of a private vehicle?
It may be worth seeking advice from a legal expert when creating your company vehicle policy to ensure the way in which your business answers the above questions complies with the relevant local laws and regulations.
Define What Counts as Business Trips and Private Trips
According to a YouGov survey, more than half (56%) of drivers in the UK are unaware of HMRC’s rules on reclaiming business mileage and the lines between private and work-related journeys can become blurred easily. HMRC states that business mileage is any travel that employees make ‘wholly and exclusively’ for business purposes, such as:
- Trips needed to complete work, e.g. deliveries.
- Trips between two workplaces for the same job.
- From an employees’ home to a client.
- To a temporary workplace e.g. building site, client’s office.
HMRC has also stated that ordinary commuting journeys or any sort of private journey don’t constitute business mileage, even if the employee runs a work-related errand along the way. By using vehicle tracking to calculate more accurate mileage (as opposed to just rounding up or estimating) and setting clear lines between private and work-related journeys, your business could be cutting fuel costs by up to 20% every month.
How to Monitor Personal Mileage with Vehicle Tracking
Tracking your vehicles through a GPS management system not only helps you to manage your fleet more effectively but it also helps to put an end to unnecessary stops and any additional journeys drivers may be taking for personal use. By using vehicle tracking to calculate more accurate mileage (as opposed to just rounding up or estimating) and setting clear lines between private and work-related journeys, your business could be cutting fuel costs by up to 20% every month.
At Fleetsmart, our vehicle tracking devices can help you to calculate more accurate mileage thanks to our advanced GPS system which offers live tracking, every 60 seconds, 24 hours a day from any global location.
We also offer optional add ons which can make differentiating between business and private use much easier. These include driver identification fobs, which help you to identify individual drivers and their vehicle usage as well as driver privacy switches which help you to comply with UK privacy laws, allowing masking of tracked positional details for private usage. Enquire today to find out more.
It’s important to note that tracking your employees doesn’t mean you distrust them, it simply means you’re using actionable data to set more clear boundaries on the rules around business and personal usage and discouraging them from committing fuel fraud.
Monitoring their use of your company vehicles and their productivity throughout the day is no different to how sales managers monitor recorded phone calls with reps, or football coaches reviewing films of the matches with their players to help improve their performance in the future. However, one thing to keep in mind is that there are laws about tracking your employees.
Should I Tell Drivers About Trackers in Their Vehicles?
The use of vehicle tracking data in the UK falls under the category of personal processing data; as such, is governed by the General Data Protection Regulations 2018 (GDPR). To ensure compliance, organisations should maintain a vehicle tracking policy that is compliant with GDPR.
While installing vehicle tracking devices, organisations should consider respecting the privacy of employees affected by the implementation of vehicle tracking. Typically, any company using vehicle tracking devices will be collecting data about the individual and not just the vehicle. Alongside location, other information such as driving styles and behaviour; this in itself has implications under the General Data Protection Regulations.
The basic principles of GDPR expect adherence to the following principles relating to the processing of personal data:
- Collected for specified, explicit and legitimate purposes.
- Adequate, relevant and limited to what is necessary in relation to the proposals for which they are processed.
- Accurate and, where necessary, up to date. Every reasonable step must be taken to ensure that personal data that is inaccurate is erased or rectified without delay.
- Kept no longer than necessary, to fulfil its purpose.
- Processed along the lines of the individual’s human rights.
- Protected against unauthorised or unlawful use, loss or destruction.
It is illegal to track a vehicle if the driver is unaware that they are being tracked.
The individual must either agree or consent to it either explicitly or implicitly. However, if clauses are added to and approved via an employment contract, then vehicle tracking is entirely legal. Statements typically included must cover the six provisions mentioned above regarding the use of this data.