You can use a private car or van for work, but you should notify your insurance company and you will need to allow for expenses.
There is a difference between using your private vehicle when you are employed by a company (i.e. it’s part of the ‘grey fleet‘) and when you are using your private vehicle and you own or part own the company.
Liability and risk
If you are carrying goods in your personal vehicle, it must be suitable for the purpose and not provide risks to the public – a car is not a van or a light truck. This means that you should not be asked by your employer to carry dangerous goods in a vehicle that doesn’t have the right safety equipment, for example. If you are carrying heavy goods, a car should have a way of preventing those goods from flying forwards and injuring the driver or passengers in a collision.
If you are asked by your employer to drive your car for work purposes, don’t assume you are covered: get it in writing from your employer. Employers are legally obliged to ensure that any vehicles used for business purposes are fully insured and fit for purpose. This includes when an employer runs a car sharing or carpool scheme that is incentivised.
You will be responsible for maintaining your vehicle’s roadworthiness.
Thousands of people every week drive while not being insured because they haven’t told their insurance company about their work driving. Using your vehicle for work means you will need to notify your insurance company as the vehicle’s use will have changed. Using your personal vehicle for private use and commuting is covered in private insurance policies, but work use may not be. The insurance company may decide that there is no extra risk and might write a ‘private with occasional business use’ policy, or they may require you to take a different premium level, it depends on the overall level of use, what you are using it for and where you are driving.
If you are under-insured, you could receive a fine of up to £300 and six penalty points added to your licence; employers are liable for fines, too, if they are knowingly under-insuring a vehicle. An insurance company may refuse to pay out a claim if a vehicle is being used for work but isn’t insured for work driving.
Vehicles used for work are more likely to be involved in an accident because of the extra mileage and there is a greater risk of a break-in if samples are carried.
You can reduce the insurance costs by fitting quality approved security devices (alarm, engine immobiliser, GPS tracker, steering wheel lock), and parking in a secure location overnight (i.e. a garage as opposed to on the road). No-claims bonuses will apply to your business policy.
You are an employee
Using your own car when employed: you are entitled to be reimbursed for expenses from your employer or, if not, claim a tax deduction from your income. This doesn’t include the cost of normal commuting, i.e. between your home and a regular office.
You are self-employed
Using your own car for your own business: you can claim expenses related to the vehicle for:
- Travel from your office or usual place of work (e.g. home) to visit customers or perform a task related to carrying out your work (e.g. picking up spare parts required for a customer’s vehicle)
- Travel between two offices to perform your work
You can’t claim for:
- Travel from your home to a regular office which will be in place for 24 months or more
- Travel that is not work-related
You can claim a percentage of vehicle expenses based on keeping a logbook of your mileage and a record of all your vehicle expenses during a fixed period or you can claim a per mile cost. You should also be able to claim the difference between a private vehicle insurance policy and a business one. Check here for the current approved mileage allowance payment (AMAP).