Company Car - FULLY Expensed?

bluenoseneil · 1 April 2012 at 5:19PM

Please give me advice on this if you can.

I have been working for my company for 3 years now and have enjoyed the use of a fully expensed vehicle. Obviously that means I had ALL my fuel and repairs paid for and the Fuel Benefit came out of my salary in tax. I am also field based working in Sales, so I don't go to and from an office, so to speak.

Now I receive a memo today from the firm saying that I am going to have to pay back any Private Mileage to them through my expenses on a monthly basis. Furthermore they are saying they have done an analysis that shows the Fuel Benefit costs me around £790 per annum in tax, which equates to 6,000 Private miles.

I did between 11,000 and 12,000 Private Miles per year between 2009 and 2012 tax years...so how would I be BETTER OFF?!!!

My questions are this:

(1) Can they just change policy without any notice? The memo went out this afternoon and they are saying it starts as of 1st April 2012.

(2) I signed my Contract Of Employment based on the fact I could enjoy the use of a fully expensed car. Surely that means they need to re-negotiate my contract with me?

It feels like a kick in the nuts but I don't want to be all reactionary about it if it really doesn't disadvantage me, but I think it does.

This is my only car in the household, and the company have not offered an Opt Out policy to buy my own car so I am feeling a little stuck.

Can people clarify for me?

marybelle01 · 1 April 2012 at 7:57PM

It strikes me that whatever the rights and wrongs contractually, the reality is that I very much doubt any court is going to force an employer to continue to bankroll your private mileage. Times are tough for everyone and employers can cut a lot of corners. When they are cutting wages and getting away with it, and laying off staff, I can't see a court having a deal of sympathy about you having to pay for the petrol you use for yourself. Not being harsh, just realistic.

somethingcorporate · 1 April 2012 at 8:28PM

I would interpret a "fully" expensed company car to mean it is fully expensed for use by yourself for the purpose of your job and not to cover private mileage. Is it explicit in the contract?

Saying that, as per the above response it is a way they can cut costs and it is evidently low hanging fruit for them.

bluenoseneil · 1 April 2012 at 9:06PM

Comments made so far are relevant.

Of course it's a cost cutting exercise and yes it is also a low-hanging fruit situation for my employer. And I have NO intention of going legal on it...haha!!

From a tax perspective with the car I pay around £153 a month with the fuel included. Once I am paying my own private mileage it will cost me around £79 a month, so my perceived saving is around £888 or £74 a month....or a tank of diesel in real terms.

A tank of fuel gets me 500 miles and I have been doing over 1000 most months since working there so my options are simple: drive less private miles, walk more (not practical in all cases!) or demand more money to offset the fact that this WAS a benefit to me, and now it isn't.

My contract stated "fully expensed company car to include REASONABLE private mileage, with the option to opt out if necessary". I now have one option...use the company car and pay for my own fuel. Seeing as how the tax payable on the car is quite high it was only really a benefit for me whilst I could do the private mileage I was doing and not pay any extra out for it.

YES I have been benefitting but now I am not I would maybe say that the company should offer me the option to not have to have a company car, and maybe buy/lease my own? This option is not available, so I am feeling a little cornered by this decision.

Finally, HR sent out the memo at 16:20 on Friday, stating this was coming into effect at the start of the new tax year, meaning I had NO time for recourse or comment at all.

The part that narked me the most was being told I would be "better off as a result"!! Anyone with basic arithmetic skills could see that isn't the case.

Is there anything I can do at all? Basically this puts me around £1200 p/a out of pocket as my private mileage is 90% necessary (so it's not like I can really cut down) and I haven't had a pay rise in the 3 years working there.

Yeah I know there's a recession on, but I think it's a low blow...

Notmyrealname · 1 April 2012 at 9:13PM

The ultimate end game is that you can refuse to accept it. They can then give you a new contract with the terms they want which you can refuse to sign at which point you will be deemed to have made yourself redundant.

bluenoseneil · 2 April 2012 at 8:07AM

Does anyone have any more comments to make?

each_uisge · 2 April 2012 at 8:24AM

What would you rather have - a comparable cut in your salary or the "benefit" of private mileage on your car?

Seems a bit of a no-brainer to me.

What types of private trips are you using the car for when not working? Is there any way you could walk instead of drive to cut down on your private mileage? Do you live in a rural area where there's no public transport at all and have to use the car? Are there local shops you could make use of (and support) instead of driving to the supermarket?

maninthestreet · 2 April 2012 at 8:25AM

When were you first notfiied of this change to your contract? If it was on Friday (30th March), then I don't think you have been given enough notice of this contractual change if it comes into force this Friday.

EDIT - just realised you only received notification yesterday (1st April), and the policy change came into effect immediately - are you sure you haven't been on the receiving end of an April Fool's prank??

Sambucus_Nigra · 2 April 2012 at 9:31AM

bluenoseneil wrote: »

My contract stated "fully expensed company car to include REASONABLE private mileage, with the option to opt out if necessary". I now have one option...use the company car and pay for my own fuel. Seeing as how the tax payable on the car is quite high it was only really a benefit for me whilst I could do the private mileage I was doing and not pay any extra out for it.

The option to opt out is the employer's - and I would take 12,000 private miles a year as being unreasonable and hence, they have opted out.

getmore4less · 2 April 2012 at 10:28AM

What are you doing to accumulate 1k personal miles a month.

That was my sort of mileage with a 200m per week commute.

I would look to combine business trips with some of the personal trips.

Agree they should give more notice for such a change.

Look inot not having a taxed car by no longer using it for any personal mileage and get your own for that, might mean leaving it at an office and comuting.

pinkshoes · 2 April 2012 at 11:04AM

Hand back the company car, get your own fuel economical car, and charge them business mileage at 37p/mile or whatever they'll pay.

Company Car - FULLY Expensed?

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free