While this comprehensive new report from the BVRLA and Energy Savings Trust highlights the fact that the estimated 14M UK grey fleet vehicles are older, more polluting, less safe and likely to cost businesses more than other fleet vehicles, it also offers best practice guidance and case studies to help organisations set objectives and achieve a wide range of benefits.
A grey fleet vehicle is one owned and driven by an employee for business purposes. The employee is reimbursed on a pence per mile basis for using their vehicle on business journeys.
The grey fleet is an old fleet with an average age of 8.2 years followed by the UK car parc which is on average 7.9 years old.
• The vehicles used by employees under cash allowance schemes cover a wide range of ages and although more modern than grey fleet vehicles, a large proportion of them are over 5 years old.
• Grey fleet and cash allowance cars are significantly higher in terms of emissions when compared to rental, car club, lease cars and vehicles in salary sacrifice schemes.
• The grey fleet accounts for the lowest proportion of Euro 6 cars.
• Grey fleet and cash allowance vehicles have significantly lower Euro NCAP (European car safety assessment) ratings compared to the other vehicle fleets.
The government can help organisations to get to grips with their grey fleet by:
• Launching a communications campaign highlighting the alternatives to grey fleet use and offering best practice guidance. For example, establishing a business car club.
• Reforming the benefit-in-kind (BIK) tax ratings to encourage the use of low emission company cars. This could be achieved by making the rates for cars emitting up to 120g/km CO2 more attractive and the rates for cars emitting more than this more punitive.
• Introducing new tax categories that provide additional incentives for drivers of pure electric vehicles (EVs) with longer ranges.
• Providing more in-life incentives to encourage use of new and used EVs. For example, free parking or bus lane access.
• Making ultra-low emission leased vehicles eligible for First Year Capital Allowances. This enables businesses to offset the cost premium associated with these cars by allowing them to deduct the full cost against their pre-tax profits.