COMPANY CAR ALLOWANCE SCHEME. Policy

Transcription

1 COMPANY CAR ALLOWANCE SCHEME Policy

2 Introduction Associated Forms This document provides information about the use of vehicles for business use under the Company Car Allowance arrangements. Scope High Mileage Claim Form Driving Entitlement Consent Form These documents can be found on the HR Intranet under Forms or Templates. This document applies to employees in the following RWE Group Companies in the UK: - RWE Npower Group plc (the UK Retail business) and all its subsidiary companies - RWE Generation UK plc (the UK Generation business) and all its subsidiary companies - RWE Technology UK Limited Where the Company is referred to in this document it means any one of the above Companies. Associated Policies/Guidelines Expenses and Mileage Claims Policy Mileage Rates Page Recruitment and Selection Policy Redundancy Policy Retirement Policy Sickness Absence Policy Maternity Leave and Pay Policy Diversity and Inclusion Statement of Principles Diversity and Inclusion The Company is committed to Diversity and Inclusion. This commitment means that all prospective and current employees and workers will be treated equally and fairly without regard to sex, marital status, race, colour, nationality, ethnic or national origin, age, religion or belief, sexual orientation, trade union or, where not relevant to the job status, ex-offenders. Staff with disabilities will receive fair treatment and are considered on their ability to do the job following implementation of reasonable adjustments to their role or workplace where appropriate. These documents can be found on the HR Intranet under Policies and Guidelines. Also, on the Health, Safety and Security Intranet: Driving and Road Safety Section Managing Occupational Road Risk Policy

3 Contents Driving License and Insurance 1 Validity 1 Insurance Provision 1 Inspection 1 Inability to drive 1 Driver Development Training 1 Company Car Allowance 2 Allowance 2 Eligibility 2 Basis of Allocation 2 New Job Need Allowances 2 Level of Car Allowance 2 Allowance Rates 2 Terms of Provision 3 Car Allowance 3 Removal of Job Need Car Allowance 3 Part-Time Employees 3 Maternity Leave 3 Long-Term Sickness Absence 3 Resignation or Dismissal 3 Redundancy, Ill Health Retirement or Death in Service 3 High Mileage Car User Compensation 4 Overview 4 Eligibility 4 Compensation 4 Calculation of Compensation 4 Compensation Payments 4 Claiming Compensation 4 Responsibilities 4 Car Allowance Mileage Claims 5 Policy 5 Mileage rates 5 Mileage Rate Calculation 5 Applicable Journeys 5 Reducing Business Mileage 5 Virtual Mileage 6 Mileage Allowance Relief 6

4 Page 1 Driving License and Insurance Validity Inability to drive If a job requires the employee to drive a vehicle in order to undertake their duties, a valid full driving licence must be produced. Insurance Provision Employees must ensure that appropriate insurance cover is provided when using their own vehicle on the Company s business. Inspection As set out in the Managing Occupational Road Risk Policy, employees must: Ensure that the vehicle that they are driving has an MOT (if required), is properly maintained and serviced and is insured for "business use". Present their licence, documentary evidence of the insurance and MOT certificate (if vehicle over 3 years old) for inspection by their line manager or the HR Service Centre, on request. This would normally be on appointment or transfer to a new position and is not a regular check. Sign a mandate giving the company permission to electronically check their licence details with the DVLA. (If a claim for mileage is made and there is no record of a signed mandate, payment will be suspended until it has been received.)* * In the event that information obtained from the DVLA is inconsistent with that provided by the employee, or affects the employee s ability to perform their role, managers should raise the matter with the individual concerned and may result in the application of one or more of the Company's HR policies which could include, but is not restricted to, Disciplinary or Capability Procedures. If an employee is disqualified from driving by a court or becomes unable to drive because of some injury or disability, they must inform their manager immediately. If an employee has a job where it is necessary to drive in order to carry out their duties and responsibilities, the possession of a valid driving licence is a condition of employment. In these circumstances, loss of a licence may result in disciplinary action. Driver Development Training All employees driving on Company business should complete on-line driver profiler assessments. Employees must discuss the results of their profiler assessment with their manager and together they should agree what Driver Development Training is appropriate and arrange for the training. This approach takes into account the risk that individual drivers are exposed to, considering mileage driven, types of road used and driver experience. Details of Driver Training courses are available on the Health and Safety Intranet under Driving and Road Safety. Defensive driving tuition will be advisable for the majority of drivers in receipt of a Car Allowance. Those drivers with a greater exposure to risk should take advanced driving tuition, leading to the IAM s Advanced Driving Test. Employees failing to produce the above documents may have their car allowance suspended until the documents are produced or may otherwise be liable to disciplinary action.

5 Page 2 Company Car Allowance Allowance Eligible employees will be provided with a taxable cash allowance, paid monthly, that they may use towards funding the provision of a vehicle. Eligibility Eligibility for the Company Car Allowance is at the discretion of the Company taking into account the following principles: For existing employees this must include clear evidence, based on six months mileage history where appropriate, that the job need criteria will be met on an ongoing basis. Each business case will be approved by the business director in conjunction with their Local HR Manager Level of Car Allowance The level of Car Allowance is set to enable the employee to properly maintain and insure their car. The Allowance is not intended to cover the full cost of providing a car. Type of Allowance Job Need Status When awarded The Allowance is awarded where an employee is required, by the Company, to have a car to undertake the job and where there is a normal ongoing job requirement to travel in excess of 10,000 business miles a year. This mileage requirement is prorated for part-time employees. The Allowance is awarded to all staff in senior management grades Level 1 to Level 4 inclusive, where it is considered an appropriate and necessary part of the remuneration package. As a guide to determining the Allowance, the Company has assumed that the employee will use a Personal Contract Plan arrangement with the maintenance option, although employees may prefer to choose alternatives, such as purchasing a new or second-hand car, provided the Car Allowance terms of provision are met. In addition, the current tax treatment has been factored into the calculation of the Car Allowance which takes into consideration the employee s ability to reclaim monies from Her Majesty s Revenue & Customs (HMRC), i.e. the difference between the current Company business mileage rate and that allowable by HMRC under the Approved Mileage Allowance Payments scheme. Note: It is the employee s responsibility to claim these monies from HMRC. Allowance Rates Basis of Allocation The contract of employment will specify whether the Allowance is granted on a Job Need or Status basis. New Job Need Allowances The allocation of a new job need car allowance must be supported by a business case, to identify the ongoing business requirement to travel. The allowance awarded is based on an employee s grade as indicated in the table below: Grade Annual Allowance Allowance per month Senior Management Grades Level 2 9, Level 3 8, Level 4 7, Personal Contract and Other Grades PC1/PC2/LEV2 6, All other grades 4,

6 Page 3 Terms of Provision Car Allowance An employee who receives a Car Allowance will be obliged to: Hold a full UK driving licence Provide a vehicle suitable for business use* Provide business insurance cover Provide GAP insurance cover (Personal Contract Plan arrangements only) Provide an alternative vehicle, whether through insurance or hired at their own expense, if their vehicle is temporarily off the road and they are required to travel on company business. Submit business mileage expense claims in line with the company s Expenses policy. * The suitability of the vehicle will be determined by the individual s manager taking account of overall Health and Safety considerations, the operational demands of the employee s role and any impact on the Company s reputation with customers which might arise from identifying the vehicle with the Company or RWE. Removal of Job Need Car Allowance Managers will review the circumstances of Job Need employees annually, in conjunction with their Local HR Manager. In the event that the requirement to travel changes on a permanent basis, i.e. if an employee no longer meets the job need mileage criteria for the foreseeable future, then they will no longer be eligible to receive a Car Allowance. Part-Time Employees Part-time employees who meet the pro-rata job need mileage criteria, or who are eligible to receive a status car allowance, will receive the full car allowance value appropriate to their grade. Maternity Leave Employees in receipt of a car allowance who take maternity leave will continue to receive the car allowance throughout the full period of maternity leave. Long-Term Sickness Absence Employees in receipt of a car allowance who are absent due to long-term sickness absence will continue to receive their full car allowance whilst they are in receipt of company sick pay. When an employee exhausts company sick pay, then the car allowance will be suspended. Resignation or Dismissal If an employee resigns, or is dismissed, from the Company, the Car Allowance will cease with effect from the employee s date of termination. Redundancy, Ill Health Retirement or Death in Service No compensation will be paid to employees in relation to Car Allowance in the event of redundancy, ill health retirement, normal retirement or death in service. In such circumstances the employee will be given six months notice that the Allowance will cease, during which time the monthly car allowance will continue to be paid.

7 Page 4 High Mileage Car User Compensation Overview A small number of car users within the Company are required to travel significantly in excess of the Job Need mileage criteria. Where this level of mileage is an ongoing job requirement, additional support over and above the monthly Car Allowance is available. Eligibility An employee who travels in excess of 18,000 business miles per annum, between 1 April and 31 March each year. The 18,000 mile threshold may not be pro-rated in order to make a claim for partyear eligibility. Claims will only be accepted where actual mileage exceeds 18,000 in one tax year. Compensation The Company will compensate an employee for the additional mileage incurred as a result of their high business mileage, over and above 18,000 business miles per annum. This compensation is an additional mileage supplement, based on the employee s actual mileage in excess of 18,000 business miles per annum. Calculation of Compensation Each year the mileage rate for the additional mileage supplement will be calculated, based on the motoring costs for the period. This rate will be applied to all high mileage claims. Compensation Payments Compensation payments will be paid via payroll, subject to normal statutory deductions. The actual compensation payment amount paid will be grossed up to ensure the employee receives the full amount of compensation. Claiming Compensation Claims for high mileage compensation must be submitted annually, relating to the period 1 April to 31 March each year, using the following procedure: Description 1 Employee travels more than 18,000 business miles during period 1 April to 31 March. 2 Employee submits high mileage claim, using the high mileage claim form, detailing total business mileage during the period. 3 Line Manager authorises high mileage claim and passes to HR Service Centre for payment. 4 HR Service Centre gross up payment to ensure net amount received is equivalent to high mileage compensation value and arrange for payment in the next available payroll. High mileage claim forms must be submitted by 31 May each year. (NB: In the event of redundancy, employees who have travelled in excess of 18,000 in the current tax year, but prior to 31 March may submit a claim for high mileage compensation up until their leave date but the 18,000 mile threshold may not be pro-rated in order to make a claim for part-year eligibility.) Responsibilities It is the employee s responsibility to: retain their own personal mileage records, based on the mileage submitted via expense claims; to submit high mileage claims within the policy timescales. It is the line manager s responsibility to: review all high mileage claims in order to understand the business requirement for the employee to travel in excess of 18,000 business miles, and where practicable, to reorganise the employee s duties to reduce the employee s mileage.

8 Page 5 Car Allowance Mileage Claims Policy The Company will reimburse employees in receipt of a Car Allowance for the business mileage that they incur when travelling on business. Mileage rates Mileage rates are reviewed annually and rates are effective from 1 April each year. Mileage rates are paid to reimburse the cost of petrol or diesel, oil and any top-up fluids. The current reimbursement rates for business miles of employees in receipt of a Car Allowance are contained within the Mileage Rates page on the HR Intranet Mileage Rate Calculation Applicable Journeys Employees in receipt of a Car Allowance may claim mileage for business travel, which is defined as journeys an employee has to make in the course of doing their job. Ordinary commuting travel, between the employee s home and their normal place of work may not be claimed for. Reducing Business Mileage The Company seeks to encourage environmental practices wherever possible, but this must be balanced against operational requirements. Employees travelling on business journeys are encouraged to use public transport or car sharing wherever possible. The mileage rate formula is based on published AA motoring costs and average fuel prices. This mileage rate calculation may mean that rates are reduced as well as increased.

9 Page 6 Virtual Mileage Mileage Allowance Relief In order to encourage employees with a Job-Need Company Car allowance to think about the merits of travelling together to meetings without being concerned that the reduction in business mileage may threaten their eligibility for an allowance, such shared journeys may be logged as virtual miles. Additionally, to encourage utilisation of existing technology to reduce the need to travel, virtual miles may, in certain circumstances, be taken into account where the need to travel is avoided through the use of video conferencing, subject to prior line management approval. Any virtual miles will be taken into account, in addition to any normal business mileage, in the periodic reviews to assess continued eligibility for job need allowances. Employees with status allowances are also encouraged to share journeys wherever practicable in accordance with the Company s carbon reduction aspirations. The Company expects employees to claim Mileage Allowance Relief under HMRC approved Mileage Allowance Payments scheme for the difference between the Company s rates and HMRC approved Mileage Allowance Payments rates. In order to facilitate making a tax claim to HMRC a detailed log will be required. Employees should maintain their own mileage records and submit claims for Mileage Allowance Relief on their Self Assessment Income Tax form. The current Approved Mileage Allowance Payment rates are 45 pence per mile for the first 10,000 miles in a tax year and 25 pence per mile thereafter. Tax relief is available on the difference between these rates and the amount that the Company pays. Virtual mileage: does not attract any payment cannot be included in any high mileage claim cannot be claimed for journeys where public transport is in any case the obvious common sense approach e.g. travelling to Central London or overseas cannot be claimed for any other journeys where the cost of alternative means of travel exceeds the cost to the Company of a journey by car may not be claimed when a physical meeting is avoided by the use of tele- conferencing or any other techniques as part of ongoing business method change to reduce the need to travel may be claimed when a physical meeting is avoided by the use of video- conferencing providing that such video conferencing is not the normal business practice for holding such meetings

10 Page 2 Document Control Status Policy Version 6.2 Previous Issue Date 25/06/2012 Last Reviewed 01/08/2012