A large number of drivers use their car for work. For most, that use is limited to travelling to and from a regular place of work – an office, for example – and this is not of any particular interest to the authorities and is generally included in a standard car insurance policy (do check your policy to be sure).
What happens, though, if you work in more than one place, or are self-employed, or are asked by an employer to use your own car for business reasons, such as travelling to and from meetings or assignments in various places? In these situations, things get a little more complicated.
If you are using your car for work, certain people have to know. Depending on the nature of your employment, these may include:
- The tax man
- The DVLA
- Your insurer
If You Are an Employee
If you are employed by somebody else and they ask you to use your car for business, you must inform your insurer. If you do not, you may not be covered in the event of an accident, which could be catastrophic. Some insurers may charge for adding business mileage to your policy, particularly if you are going to do a lot of miles, but you should be able to reclaim this from your employer as an expense. Any mileage you do for business purposes should also be reclaimed from your employer.
If You Are Self-Employed
If you are self-employed, then you too have to tell your insurer that you are doing business miles, and how many. You will, of course, be liable to pay any costs yourself, but as a self-employed person you can offset many business travel expenses against tax. Your financial advisor or accountant will be able to advise you.
There are different classes of business use, so make sure you know which applies to you and that you have appropriate cover. If in doubt, speak to your insurer or call DVLA customer enquiries.
Commercial or Not Commercial?
Some people confuse business use with commercial use of a vehicle, but if you do your insurance may be invalid. In very general terms, commercial use is where the vehicle is of primary importance in carrying out the role, such as a taxi or minibus driver or delivery van driver. Business use usually refers to the use of a vehicle incidentally to the role, such as travelling between multiple sites to do work that does not require the vehicle. However, definitions can vary so make sure you read the policy documents carefully.
On Your Own?
Finally, make sure that your insurer and other appropriate people know if you are not travelling alone when covered by the business mileage aspect of a policy. For example, if you take passengers with you to meetings or business appointments, they may not be automatically covered under your policy (or may invalidate that policy or affect your position with regard to tax or expenses), so make sure they are declared from the outset.
This post was written by Neal Bricker, an experienced writer on all things car-related.