What your employees need to know when driving a company vehicle

Company vehicle usage

Usually company vehicles are allocated mainly for business purposes, but reasonable private use is sometimes allowed, depending on the company policy. Normally a set number of kilometers will be granted for private use. It will also be a requirement to keep accurate log of the kilometres driven for business and for private use.

In some cases, where the company vehicle is the only means of transport, private usage for vacations may also be permitted by the company.

If an employee is not issued a company petrol card, most companies will then require that the employee pay for the petrol in advance and claim it back from the company. Though, some companies will grant a fuel advance.

The employee will be required to make sure that the company vehicle remains in a good condition and stays road worthy. It is advisable to report any faulty functions to the company to prevent being held liable for negligence.

Employees driving company vehicles should always abide by traffic rules, for example speeding, talking or texting on cell phones while driving and parking in no-parking zones, will most definitely be a company policy. If the occasion arises whereby the employee did not abide by the rules and are caught, the fine would be for their own pocket.

The privilege of driving a company vehicle does not mean it belongs to the employee. Employees should never allow anyone else, other than themselves to drive the company vehicle, unless a written consent has been issued.

Drivers of company vehicles will not be permitted to carry passengers in their vehicles whilst on duty unless such passenger/s are being transported for company business purposes.

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How does a company vehicle affect your tax?

Employees allocated company vehicles will be subject to fringe benefit tax, calculated as per the rules laid down by the South African Revenue Services.

The private use of a company vehicle currently constitutes a benefit to the employee, which is taxable. There is an obligation on the company to tax this as a benefit.

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What to do when involved in an accident with a company vehicle

In the event of a company vehicle being involved in an accident, the employee should immediately:

  • Check for personal and other driver/s and passenger/s injuries
  • Obtain personal details of the other driver/s and details of their vehicle/s and insurance
  • Check if there were any witnesses and note their details down
  • If possible, take ample amount of photographs of the accident scene and vehicle/s involved
  • Report the accident and details thereof to a Manager of the company, who will in turn report it to the relevant people and the insurance company
  • Report the accident to the nearest Police Station within 24 hours and ask for a case number and also record the name and rank of the police official’s that the case was reported to
  • Never, under any circumstances, admit liability to an outside party

In the case where a company vehicle is stolen or hijacked, the incident should immediately be reported to the nearest Police station and the name and rank of the police official should be recorded together with the case number and then reported to a Manager of the company.

The company will usually settle any insurance excess related to the accident, stolen vehicle or hijack, unless the accident/crime was caused by the employee due to negligence.

Note to employees involved in a vehicle accident, vehicle hijack or stolen vehicle that belongs to a company or even another person, and it was due to their own negligence:


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