COMPANY CAR POLICY. This policy should be read in conjunction with the following company issued documents:

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1 1 General COMPANY CAR POLICY 1.1 Policy Objectives The purpose of this policy is to explain: Company car eligibility and allocation Guidelines regarding use of company vehicles The cash allowance alternative Obligations under the policy, including health and safety Your company car is an expensive and important asset to the business and should be treated with care both in the way it is maintained and driven. All drivers are bound by the terms of this policy. You should therefore familiarise yourself with its contents. Questions regarding this policy should be directed to the HR Manager. 1.2 Environmental The Southern Co-operative (TSC) car policy aims to minimise the effect of the car fleet on the environment and encourage the use of fuel efficient cars and those with low CO 2 and tailpipe emissions. Colleagues will not therefore be able to choose cars that TSC feel do not meet this objective. Additionally, all colleagues are expected to maintain company cars in line with the manufacturer s recommendations and drive them in a fuel efficient manner. This will both reduce vehicle emissions and running costs. 1.3 Terms This policy is effective from 1 June TSC will periodically review this Policy and reserves the right to alter it at any time. This policy should be read in conjunction with the following company issued documents: Road Safety Policy Driving on Business : Health and Safety and driving guidance TSC Travel and Expenses policy Use of cars : fuel and mileage allowances for company car drivers, cash allowance takers and private car users. By opting to have a Company car or cash allowance you are deemed to have accepted the terms and conditions set out in this policy, including giving authority for any deductions from your salary necessary in accordance with this policy. 2 Company Car Eligibility and Allocation 2.1 Eligibility Entitlement to a company car falls into two categories: Job Need only - essential user, i.e. a car is essential to carry out your role. This is defined as follows : o For field based roles requiring travel between TSC premises eg Area Operations Manager, HR Advisor, Field Area Auditor OR o For any Central Support role that : involves call out duties and/or three days or more per week away from office and at least 8,000 business miles per year Benefit usually non-essential users, i.e. your role is at a level where a car is provided as part of your benefits package as determined by TSC Reward Policy. If you have entitlement under one of the above categories, this will be specified in your contract of employment and TSC will provide you with a company car subject to the following conditions being met : You hold a current and valid full UK Driving Licence Issued by Human Resources June 2011 Page 1 of 10

2 You do not have any physical disability, or illness which could affect your ability to drive Your accident record is acceptable You agree to the terms of the company car policy The vehicle is maintained and driven in line with this policy at all times A company provided car will be available for normal social, domestic and private use as well as for company business. See paragraph 6.1 in respect of Authorised Drivers. TSC reserves the right to withdraw entitlement to a company car in instances of misuse/abuse. Such instances may also be subject to disciplinary action. 2.2 Allocation Colleagues whose roles are in Band B and above will be allocated a maximum monthly lease amount according to their Band. They may choose one vehicle up to that maximum with CO 2 emissions of 160 g/km or below from any manufacturer. 2.3 Choice Colleagues whose roles are in Band C and below can choose a vehicle from a predetermined list of approved vehicles. Please note that some roles may be allocated a particular make/model of vehicle. Colleagues will be advised in writing of the applicable Band and monthly lease limit or choice list. The monthly lease allowances are based on whole life vehicle costs on a 4 year, 80,000 mile lease hire arrangement with TSC s chosen provider, currently Lex Autolease (Lex). The lease contract covers servicing, maintenance, road fund licence, MOT, breakdown cover and tyre replacement. All vehicles must include ABS, factory fitted alarm, driver s airbag, power steering and factory/dealer fitted audio system. In the event that a car reaches 80,000 miles prior to the end of the 4 year lease period consideration will be given to an earlier replacement or a re-negotiation of the contract. The decision is entirely at the discretion of TSC. Additionally, TSC reserves the right to re-allocate vehicles amongst colleagues within a Band to facilitate pooling of mileage where vehicles are near to individual mileage limits. New starters Colleagues joining the business will normally be able to order a new car after successful completion of the probationary period. However, TSC reserves the right to allocate an unassigned used car to colleagues where necessary. Every attempt will be made to ensure that the reallocated vehicle is aligned with the colleague s normal entitlement. It is possible that a cash adjustment for vehicles outside normal entitlement may be made this will be looked at on a case by case basis and agreed between the Head of function and the HR Manager. Accessories: Colleagues in Bands B and above may add manufacturer or dealer fitted accessories to the car. Adding accessories will increase the monthly cost therefore you must ensure that this falls within your allowance. Other accessories can be fitted provided that they are at the expense of the colleague and will not detract from the value of the vehicle, or affect its safety or efficiency. The accessories must either be removable leaving no damage to the car when returned to Lex, or must remain on the car upon its return. No payment will be made by the TSC or Lex for any residual value of these accessories. No accessories or changes can be made to a company car without the prior written permission of the Head of HR. 2.4 Trading up Colleagues in Bands A and above may trade up by 100 per month if desired. If you are eligible to and choose to trade up you are required to pay a private use contribution being the difference between the actual monthly cost of the vehicle and the monthly limit for your Band. Issued by Human Resources June 2011 Page 2 of 10

3 The amount will be deducted from salary each pay period. In the event that you leave TSC s employment prior to the end of the lease you are required to pay any remaining contributions due on your car. Under current tax legislation, private use contributions are eligible for tax relief at your marginal tax rate. Contributions will therefore be shown on your P11D form at the end of the tax year. 2.5 Trading down All users may trade down, by one Band. If you trade down you will be entitled to receive 100% of the difference between the monthly lease limit for your Band and the actual monthly cost of your vehicle. This amount will be paid to you four-weekly via salary and is subject to tax and National Insurance. Note: this is subject to a minimum payment of 10 per pay period. 2.6 Cash Allowance Non-essential users may opt for a cash allowance in lieu of a company car see section 11 for details of the cash allowance policy. Job Need users are deemed essential users and so cannot opt out of the provision of a company car. 3 Company Car Tax All colleagues provided with a company car which includes private use of their vehicle are required to pay Benefit In Kind (BIK) company car tax. You should make yourself familiar with the current company car tax system prior to choosing your company car. You should consider carefully the following general guidance: The lower the car s CO 2 emissions and list price (not transaction price) the lower your company car tax will be. The CO 2 tax band for a car is not fixed for the life of the vehicle and therefore can increase each year For more details contact HR Manager or HR Services Manager or visit 4 Ordering Your Company Car 4.1 Selection You will be contacted by Lex to discuss your vehicle requirements/preferences. They will be able to provide quotations and advise on likely availability of vehicles. Quotations will include the full costs of the vehicle including maintenance, road tax, breakdown cover and any accessories. 4.2 Order procedure Once you have finalised your selection, Lex will produce an order form detailing the specific vehicle choice. You will be required to sign this form to confirm the details. Please check the order form carefully as changes cannot be made after the order has been placed. Also ensure that you understand the tax implications associated with your choice of vehicle. By signing the order form you are also agreeing to any deduction from salary/or repayment in full, of trading-up costs, in the event you leave TSC before the end of the lease period. Completed order forms are subject to authorisation of the Head of HR. The order will then be placed by the HR Department Administrator. 4.3 Delivery You will be contacted in advance to arrange a suitable time for delivery. If you are an existing company car driver your current car will be collected at the same time and you therefore need to ensure that any transfer of phone kit is arranged in advance (where applicable). When your car is delivered you should inspect it for any defects. You will be required to sign a delivery note to confirm the quality of the vehicle. All drivers must read and fully understand the vehicle manufacturer s and leasing company s driver manual/pack. The driver must also familiarise themselves with all the controls of the vehicle and understand and agree to the terms of the company car policy before the vehicle is driven. Issued by Human Resources June 2011 Page 3 of 10

4 5 Running Your Company Car 5.1 Introduction You are responsible for ensuring your company car is maintained in a safe and roadworthy condition at all times. It is your responsibility to ensure the car is serviced in line with the manufacturer s recommendations and that the following vehicle checks are carried out on a regular basis: Tyres condition and correct pressures (note that under inflated tyres can increase fuel consumption as well as being potentially dangerous) Brakes ensuring they stop the car adequately and in a straight line Lights ensuring they are all functional and clean Windscreen/ windows ensuring they are clean and free from damage Fluid levels oil, windscreen cleaner, engine coolant Note: smoking in company vehicles is strictly prohibited. Should a tyre be damaged (side wall gash or a bulge) it should be considered for immediate assessment/ replacement. Please contact Lex Vehicle Service Management should you have any doubts over the safety of a tyre. There is a mobile call out service available if your car does not have a spare tyre. In addition the vehicle should be regularly cleaned both inside and out, and treated with care. Any damage outside of fair wear and tear may be repaired by the company and recharged to you. Please see paragraph 10.2 for details. 5.2 Maintenance and repairs All vehicles come with a Lex maintenance contract that covers all normal servicing, routine maintenance and repairs including replacement tyres, batteries, exhausts (arising through fair wear and tear) and MOTs. RAC breakdown cover includes Homestart, Recovery and Roadside Assistance in the UK and Europe. Vehicles should be booked in for servicing via Lex Vehicle Service Management (currently or Important Note : all windscreen damage and repairs must be dealt with via Allianz insurance (Policy Number BV ) select the option for windscreens which will automatically connect you to our approved windscreen repairer currently Autoglass. 5.3 Replacement vehicles If your car will be off the road for maintenance and you require a replacement vehicle you should arrange a courtesy car through Lex Vehicle Service Management. You will normally need to give a minimum of five days notice if you require a courtesy car. If your car is off the road due to an accident you will be provided with a courtesy car if you use an Allianz approved repairer. If your vehicle is off the road for any other reason you will be provided with a daily rental or pool vehicle. 5.4 Driving offences and fines The driver of the vehicle must drive within the law including: Ensuring that a valid road fund licence is displayed Ensuring that traffic signs and statutory speed limits (including variable speed limits) are observed Ensuring bus lane and clear zone regulations are observed Ensuring that the vehicle is always sensibly parked and not in breach of any regulations There are many types of automated fines including speeding, parking and bus lane enforcement as well as on the spot fines. Payment of any motoring fines is the responsibility of the colleague and as such must be must be paid immediately. All such fines will be forwarded to the colleague s home address as soon as TSC are notified and colleagues are Issued by Human Resources June 2011 Page 4 of 10

5 responsible for payment. Colleagues are also responsible for payment of any administration charged levied by Lex these will be deducted from your salary. If fines remain unpaid TSC is legally bound to pay them. All costs will then be deducted from the colleague s salary. Colleagues must advise their line manager and HR Manager immediately if they lose their licence or are disqualified from driving either temporarily or permanently. Failure to notify TSC of a loss of licence is regarded as a serious disciplinary offence. If you lose your licence and it is deemed that your job cannot be carried out effectively without it, TSC reserves the right to terminate your employment. 5.5 Use of vehicle abroad Company vehicles may be taken outside of the UK. Colleagues must contact Lex Autolease as soon as possible and at least 10 working days in advance of travel in order to ensure that the necessary Vehicle on Hire Certificate is received in time. Additionally, you should obtain a copy of the car insurance certificate from the Insurance Administrator. Whilst travelling overseas on private use you must ensure you have suitable travel insurance for the vehicle and breakdown cover that includes vehicle repatriation. Please contact HR Department Administrator or Lex for further information. When driving overseas you should carry your driving licence at all times. Please note that in some European countries: An International Driving Permit is required Vehicles must carry a warning triangle, spare light bulbs and fuses Vehicles must carry a fire extinguisher and first aid kid High visibility jackets must be carried for each passenger in the vehicle Snow chains must be fitted A white GB sticker is compulsory in all European countries. You should also adjust your headlamps to avoid dazzling oncoming drivers. 5.6 Towing with a company vehicle Colleagues may only have tow bars fitted to their vehicles once they have received authorisation from the Head of HR. Tow bars must either be manufacturer fitted or fitted by a recognised accredited fitter, and be paid for by the colleague. If on the return of the company car the tow bar is to be removed the colleague will be responsible for all costs to return the vehicle to its proper condition (ie make good any damage or cut out areas to the bumper or trim). It is the colleagues responsibility to ensure that any caravan or trailer that they tow conforms to the vehicle s towing limits and operating conditions, as laid down by the vehicle s manufacturer (the requisite information will be available in the vehicle handbook). The colleague is responsible for safe towing procedures, and must ensure that any towed equipment is insured under their own insurance cover. 6 Insurance 6.1 Authorised drivers Company car drivers and their spouses/partners who hold a full UK driving licence are authorised to use company vehicles. Additional drivers may be accepted at TSC s discretion typically a close family member as long as the individual is over age 25 and has a full and valid UK driving licence. If an additional driver is required a Driver Authority Request Form must be completed and sent to the HR Department Administrator together with a copy of their driving licence (photo card and paper versions). Authorisation for spouses/partners or any other additional drivers can be withdrawn at any time by TSC. In a genuine emergency, such as incapacity or illness, the authorised user may nominate another driver for a specific journey, provided they hold a full and valid UK driving licence. Issued by Human Resources June 2011 Page 5 of 10

6 Anyone driving a company vehicle without the correct authorisation will be uninsured and committing an offence. This may result in disciplinary action against the colleague responsible for the vehicle. TSC will undertake regular driving licence checks and retain copies for reference. Any changes to licences, including endorsements or loss of licence, must be notified as in paragraph 5.4 above and a copy of the licence provided to the HR Department Administrator. Reinstatement of authorised driver status following a loss of licence is not automatic and will only be considered once the ban has expired. 6.2 Conditions of insurance Company vehicles are insured through a comprehensive motor insurance policy and may be used for the following purposes only : In connection with the company's business, or For social, domestic or pleasure use Vehicles must not be used for : Hire or reward Driving tuition of any nature Racing, pace making, rally driving, off-road activities or any other competitive event The insurance policy does not cover loss of personal effects or company property stolen whilst in the company car. Colleagues should not leave company property such as mobile phones, laptops or sensitive information in an unattended vehicle. Any cost of replacement of such items will be recharged to the colleague s cost centre and may be subject to disciplinary action. The insurance policy is currently subject to a 500 excess. TSC reserves the right to make a deduction from a colleague s salary equivalent to the excess payable (or cost incurred by TSC if less) in the event of the second and subsequent accident/damage incident in each 48 month period (commencing from issuing of this policy or allocation of vehicle as appropriate, whichever is the latter) which TSC deems is the colleague s fault or that of an authorised driver who is not driving on TSC business. 6.3 Driving licence checks All colleagues who drive on business will be required to undergo annual driving licence checks to ensure the colleague has a full and valid driving licence for the category of vehicle they are required to drive on business. Colleagues with more than 6 points on their licence are required to have their licences checked more frequently. You may be asked at any time during your employment to provide evidence of a full and valid UK driving licence by TSC. Failure to provide evidence of your legal entitlement to drive will result in TSC insurance being removed and therefore any driving carried out will be unauthorised, uninsured and hence illegal. TSC will also request evidence that any authorised named driver has a full and valid UK driving licence on an annual basis. 7 Accidents 7.1 What to do in the event of an accident In the event of an accident the colleague or the driver of the vehicle must: Stop the vehicle in a safe position If anyone is injured, call an ambulance and the police Provide name and address and confirm that the vehicle is covered by company insurance. Provide policy details if known. Obtain name, address, registration number and insurance policy details of any other driver involved. If they do not have their insurance policy details to hand ask the name of their insurer or, failing this, their broker or company name if a company vehicle. Note names and addresses of any independent witnesses. Make a note and rough diagram of what has happened. If you have a camera, take pictures of the scene. Do not discuss who was at fault in the accident or admit any liability. Issued by Human Resources June 2011 Page 6 of 10

7 8 Fuel Report the accident to Allianz Accident Management as soon as possible on quoting policy number BV Important Note : if it is clear that no one has suffered any personal injury (in your vehicle or in other vehicles involved) and you believe that the other party was at fault please contact the TSC Insurance Administrator as soon as possible in the first instance BEFORE making any contact with Allianz. At the time of any accident and afterwards you are expected to co-operate fully with TSC, police, insurers and any other authority or body investigating the accident. If you receive a notice of intended prosecution from the police, you must notify the HR Manager immediately. If you receive a notice of prosecution from solicitors acting for another driver you must notify the Insurance Administrator immediately. After any accident, whether caused wholly or partly by you or another authorised driver, TSC reserves the right to place you on a driver training course or review your entitlement to a company vehicle. 8.1 Fuel Cards Most company car drivers are currently able to have a fuel card to facilitate purchase of fuel and oil in the UK for both business and private journeys. The fuel card must only be used for the colleague s company vehicle. Colleagues eligible for private fuel may reclaim the cost of fuel purchased for journeys outside the UK via expenses subject to provision of receipts. The provision of fuel for private use is a Benefit in Kind and is taxable. Due to the level of personal taxation on private fuel, many colleagues may not find this benefit cost effective and can opt out if they wish. You can opt out of the private fuel benefit at any time by notifying the HR Manager. Following opt out you may either : (a) continue to use the fuel card for fuel purchases but must submit a four weekly mileage return detailing all of your business journeys and total four weekly mileage. The cost of private mileage will then be deducted from your salary using the current HM Revenue & Customs (HMRC) Advisory Fuel Rates (AFR). The AFR is currently reviewed four times a year by HMRC and any changes in rate usually take effect from 1 March, 1 June, 1 September and 1 December. The AFR is published on HMRC website Details are also available from the HR Manager. OR (b) Please note, if you fail to submit a business mileage return, the full cost of fuel will be deducted from your salary. You can opt not to have a fuel card and simply claim business mileage. The appropriate rate is detailed in the Travel and Expenses Policy. The option to opt back into free fuel for private use will not be available in the future. 9 Changes in Circumstances 9.1 Promotion If you are promoted, you must remain in your current car until the expiry of its term. Any trade up contributions or trade down reimbursements relevant to that car will amended to reflect the difference between your old Band and new Band. If no trade up or down has been taken you will be entitled to a four-weekly payment of the difference of Band allowances. Issued by Human Resources June 2011 Page 7 of 10

8 9.2 Secondment, moving job If you are seconded or move jobs you will usually keep your current car until the expiry of its term. If you are transferring from an essential user role and your new role does not require a car, we reserve the right to withdraw car provision. 9.3 Maternity If you go on maternity leave you are entitled to keep your car for the duration of your leave unless your intention is to leave permanently. If you decide to leave permanently, you will be required to return your car within one month of you notifying your decision. 9.4 Long term sickness In the event that a colleague with a Job Need car is absent due to long term sickness the situation will be monitored and it will be agreed between the Head of function and HR Manager as to how long they will be able to keep the vehicle. Reviews will take place at three monthly intervals and any decision will be dependent on circumstances including the colleague s ability to drive. 10 Returning your company car 10.1 When company cars should be returned Reason for return End of the lease Resignation When vehicle will be collected On delivery of the new vehicle, key for key exchange (unless you are buying the vehicle) On your last day of employment On dismissal On your last day of employment (actually worked) * Loss of licence Medical condition that prohibits driving Other withdrawal of benefit including violation of this policy Immediately Immediately Immediately * Where a colleague is paid in lieu of notice the car will not normally be made available during the notional notice period Collections of company vehicles will be arranged by the HR Department Administrator. You must provide 48 hours notice if your vehicle will not be available for collection Condition of vehicle You are required to return the vehicle in a clean condition together with all spare keys, owner s instruction manuals, service history, tools etc. TSC reserves the right to charge colleagues for the cost of replacing missing items belonging to the vehicle and for the cost of any damage to the vehicle that arises due to misuse or non reported/repaired damage, for example: Own fault damage to body and trim Cigarette burns and stains to upholstery In case of dispute regarding vehicle return conditions TSC follows the BVRLA guidelines to fair wear and tear and details of definitions of acceptable vehicle conditions are available from Lex by contacting the One Call number or from the HR Department Administrator. If you misuse a company vehicle, TSC reserves the right to place you on a driver training course or review your entitlement to a company vehicle Conditions specific to leavers Before you leave employment you should ensure that any final business mileage returns are submitted (as applicable). If you have traded-up, any contributions outstanding for the remainder of the term will be deducted from your final salary. In the event that there is insufficient funds to collect the amount due, you agree to repay TSC direct by cheque or bank transfer. Issued by Human Resources June 2011 Page 8 of 10

9 10.4 Buying your car at the end of lease If your car has come to the end of its lease, you can purchase the vehicle if you wish. You should contract Lex direct to arrange a non-negotiable quotation. Please note that TSC will not get involved in this process, and the process of purchasing of your lease car will be between you and Lex. TSC will not provide any guarantees on any ex company cars. 11 Cash Alternative 11.1 Eligibility Colleagues who are non-essential users may opt for a cash alternative instead of a company car. Before electing the cash alternative, you should satisfy yourself that it is the most financially suitable option. You will still be required to provide a suitable and appropriate car for business use. Colleagues may only elect for the cash alternative when the term on their company car has expired. Colleagues who elect for the cash alternative must also forgo the option of free private fuel Allowances If you are eligible to opt for a cash alternative you will be advised in writing of the appropriate cash allowance. Colleagues who elect the cash alternative will be entitled to reclaim business fuel costs using the HMRC Advisory Fuel Rates as detailed in 8.1 above. In addition to this colleagues will be entitled to claim tax relief from HMRC on the difference between these rates and the HMRC Authorised Mileage Rates - Approved Mileage Allowance Payments (AMAP). Please see HMRC website for current rates. Reclaiming the difference between the rates paid by TSC and the AMAP rates is the responsibility of the colleague as this represents their personal income tax calculations. Please note that the cost effectiveness of most cash allowance schemes requires the colleague to make this tax reclaim. The cash alternative will be paid four weekly as a non-pensionable supplement to salary and will be subject to tax and National Insurance as appropriate. The allowance will be fixed for the replacement cycle policy for the company car regardless of promotion, although the colleague may opt back in to the company car benefit after the period of one year Provision of suitable vehicle Colleagues who take the cash alternative must provide a suitable car for business purposes. TSC regards the following as a suitable car for use on company business: Under 5 years old and have covered less than 100,000 miles Fully maintained (in line with the vehicles manufacturers recommendations), in a roadworthy condition and meet all legal requirements, such as a valid MOT (where applicable) and tax disc Fully insured for business use TSC reserves the right to remove the cash alternative where there is evidence of noncompliance with the conditions above. Colleagues may wish to explore purchasing a used or new car via Lex, with whom TSC has negotiated special terms for colleagues. Visit the website at password: c4s 11.4 Replacement vehicles and other travel expenses Colleagues who elect for the cash alternative must use their car for business use where appropriate. A colleague may not claim any other travel expenses unless it is deemed that alternative travel is a more efficient and effective way to travel. Issued by Human Resources June 2011 Page 9 of 10

10 Colleagues will also be required to provide their own replacement vehicle if their own car is off the road for any reason. Other than in exceptional circumstances, a colleague may not have use of any hire car or pool car through TSC. Issued by Human Resources June 2011 Page 10 of 10