Advice: Creating a company van policy for a small business - By Robert Wastell, managing director, CompareContractHire.com

Most small companies probably don’t even think of running a structured company van policy. After all, many small businesses only run a few vehicles.

And the acquisition and on-going management of the company’s business vans is often looked after by an individual as part of a wider job function – quite often it’s the business owner.

Understandably, then, it doesn’t always get the priority and attention it might deserve.

However, adding process and structure to the buying and selling of company vans – or, alternatively, to the management of business vans using contract hire – can help reduce costs. And make sure the business and staff meet their legal obligations.

Here are the 12 key points to consider.

1, Company policy statement – What is the purpose of providing the van? Do you give staff any choice? Or is it strictly on price – manufacturer’s or monthly contract hire rental?

2, Who does what? – What are the responsibilities of the driver for looking after the van and maintaining it? And what are those of your company? Make sure this is reflected in your employee’s contract or employer’s HR handbook if you have one.

3, Guidelines for using company vans – How should they be used? And when? What happens when a driver has an accident? And what are the servicing arrangements for the van?

4, Who gets a company van? – Who qualifies for a company van? What is the policy for the company signing off an order with the dealer or contract hire supplier?

5, Fuel policy – Do your staff pay for their own fuel and claim it back? Or are they issued with fuel cards? Can they claim for their private mileage as well? And if they have to claim fuel back, do they need to present a VAT receipt?

6, Driver’s responsibilities – What is the policy when a driver breaks down? What about parking and speeding fines? Are you clear on who pays for these fines? Using mobile phones on company business is a key area within a company’s Duty of Care responsibilities. So what are the rules for in-van use?

7, Insurance – Who is insured to drive a company van – other staff, driver’s spouse for example – and what happens if a driver’s personal possessions or possibly their tools are stolen if a van is broken into?

8, Taxation – Each driver will have to pay Benefit-in-Kind tax on their van if there is private use – this is known as company van tax. If you provide free fuel, this will also have to be declared as part of your annual employee tax returns. (For more on private use of company vans and when you should pay van tax go to Tax: what is company van tax?)

9, Changing company vehicles – Telling your drivers how you expect the vehicle to be returned is important. If you buy your vans, a good vehicle condition allows you to get a better price, whether you use an auction or as a part-exchange for a new vehicle. If you use contract hire, the leasing company will expect the van to be returned in a certain condition – normally this will be referred to as CAP Average market value (CAP is one of the key secondhand valuers leasing companies use as a guide). Failure to meet this will mean further charges to your business.

10, Health and Safety/Environmental awareness – What is your Health and Safety policy? Do you have one? And how do you monitor drivers adhere to this? Other important issues that need covering include: compliant load capacity for the van; helping drivers reduce accidents; ensuring drivers have regular eye tests; and how many hours you expect your drivers to spend behind the wheel.

11, Company vehicle withdrawal and termination of employment – Defining the areas where your business considers withdrawing the drivers’ vehicle or fuel card should leave the employee in no doubt where they stand when they join the company.

12, Driver acceptance form – Getting a driver to sign a form which accepts all of the conditions on their vehicle before you hand it over is often a wise move.

Further information

• You can find a fully downloadable pdf of a company car policy here on the CompareContractHire.com website. BusinessVanManager.co.uk readers can modify it to their own purposes