Because of the current pandemic, more people are working from home. Employees with company vehicles don’t necessarily need them at the moment, yet your business is still paying taxes on those underused vehicles. Instead of letting those company cars sit out on someone’s driveway, it may be more beneficial to turn them into pool vehicles.
By definition, pool cars are vehicles that are made available for use by more than one employee of a business. Conversely, company cars are vehicles that are used by a single employee. Pool cars and company cars are taxed differently, therefore they need to be tracked in different ways. This article will discuss the process of changing company vehicles into pool vehicles and the many ways this switch can benefit your business.
The Benefits of Switching to Pool Vehicles
Switching your company vehicles to pool vehicles will positively impact your business. Below are the five primary ways pool vehicles make sense, especially during the current pandemic.
Download our Guide: Informing HMRC about Switching to a Pool Car
1. Pool Vehicles Are Cheaper
It’s much cheaper to buy or lease one pool vehicle for several employees than it is to purchase separate vehicles for all of your employees. By sharing vehicles, your business will save money on fuel, maintenance costs and servicing fees. Studies show that you can save an average of £8,700 by investing in pool vehicles rather than company vehicles.
2. Every Employee Will Benefit
Pool cars can benefit a larger number of employees, whereas company cars can only be used by a select few. Carpooling can be encouraged, which may ensure better punctuality for all your employees. Not to mention that it may increase employee bonding, which can directly benefit team collaboration.
3. It’s Better for the Environment
The fewer cars your business uses, the less fuel will be wasted. Pool cars are a simple way to reduce your carbon emissions and work towards a greener fleet. Depending on your business’s needs, you may also want to consider using electric vehicles as pool cars to further help the environment.
4. Pool Vehicles Aren’t Liable for BIK
Unlike company cars, pool vehicles aren’t considered to be a company perk. As such, employees who use pool vehicles won’t have to pay a Business in Kind (BIK) tax. Moreover, your business won’t have to pay employees’ national insurance contributions.
5. You Get Access to More Vimcar Features
EU data laws prevent the tracking of company vehicles. By switching to pool vehicles, you’ll get to access more of Vimcar’s fleet tracking features. Vimcar lets you track pool cars so you can view their locations in real-time, set alerts to be notified when they leave the company car park and download the mileage reports for each vehicle.
A digital fleet tracking system like Fleet Geo makes it easy to oversee your pool vehicles with just a few clicks of your mouse!
Want advice on how to better manage your fleet? Our fleet experts can give you a free consultation!
How to Make the Switch to Pool Vehicles
Making the switch from company cars to pool cars is simple. You do not need to inform the HMRC about having a pool car, but you do need to inform them if you are discontinuing the use of company cars. There are a few ways you can do so:
- Inform the HMRC by filling out a P46 form. You can find that form here.
- You can also inform HMRC through your payroll software or PAYE Online.
For more information on making the switch from company vehicles to pool vehicles, download this form.
Time to Make the Switch!
Switching your company vehicles to pool vehicles makes sense in the current climate. More and more employees are working from home, while their company cars sit unused in the driveway — all the while accruing taxes. By turning those vehicles into pool cars, you’ll save money, reduce carbon emissions and employees won’t have to pay BIK taxes.
If you’re making the switch to pool vehicles, you need to invest in a digital fleet tracking system like Fleet Geo. Pool vehicles have a higher ROI, especially when installed with a GPS vehicle tracker. To learn more about how Fleet Geo will benefit your business and make tracking your pool vehicles easier, contact our team of customer service representatives today.