Company Car Schemes

Company Car Schemes

Home Delivery Network, a large national parcel delivery business with a turnover in excess of £350m, required help to gain control of their Company car scheme and benefit provision. HDN was formed from 2 Companies with different philosophies; the first was exiting from an ECO scheme and the second moving away from traditional Company cars into cash. They were left with a mixture of Company Cars, Cash Allowances and Hire Cars. Initially 180 employees were affected and both duty of care and tax compliance was also an issue.

What was required?

The Fleet Director recognized the need for a single scheme, which would provide a solution which also addressed concerns about corporate manslaughter. The HR Director wanted a scheme that would provide appropriate benefits, taking into account individual circumstances and affordability to the business. Both wanted to ensure that the migration from old to new was handled with sensitivity. It would also be necessary to liaise with HMRC about BIK taxation due on hire car use.

The solution

We devised a scheme based on business mileage, with higher business users remaining in Company Cars and those driving less miles moving to an appropriate cash allowance. The scheme was linked directly to the Company grading structure to provide internal equity. A 12 month implementation period was agreed after which all eligible staff would have moved on to the new scheme. A settlement figure was agreed with HMRC to cover any unpaid tax and all those in receipt of the Car benefit were included in the P11D return.

The results

The scheme was fully implemented within 12 months and linked to a new and simplified management grading structure. The choice of vehicles was limited to 4 brands to provide greater operational efficiency, with full manufacturer terms put in place and a single contract hire provider.

If you are in Northampton or the surrounding area and need some advice on company cars or any other aspect of reward management, contact us using the form on the right, or call 01604 763494.

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“As a result of the project, the business gained much greater clarity and was able to focus on a clear & concise car policy. The business had the opportunity to offer a more structured and tightly controlled Company car fleet, with an emphasis on efficient and cost effective vehicles. It also allowed colleagues to feel more settled, especially when it came to P11d compliance, as we moved away from long term hire cars.”

Pete Johnson, Company Car Manager Home Delivery Network Limited (HDNL)