333 – Corporate Manslaughter fines: what should we make of this?

SO THE Sentencing Guidelines Council (SGC) suggests your company will pay a minimum £500,000 fine. This would occur if the health and safety structure of your business was so lax it led to a death (see our news story Minimum Corporate Manslaughter fine: £500,000).

You would be forced to publicise the prosecution so that everyone involved in your business – from staff to clients – knew of the lapse. The SGC is quite clear on this: “the publicity should be designed to ensure that the conviction becomes known to shareholders and customers in the case of companies and to local people in the case of public bodies, such as local authorities, hospital trusts and police forces,” read the statement.

While I think the direction of this statement is aimed at larger enterprises or local government bodies, that doesn’t mean small businesses slip under the radar, either.

Driving on business – as the car is the extension of the workplace – is included under the Act. So it’s worth spending some time just to make sure that you have all your ducks in order.

A simple way to comply is not to have any company cars at all but insist that public transport is used by your staff. Or, if this isn’t always available, then use a daily rental car for the journey, or a car club. In that way the risk is transferred – the daily rental company or car club must provide a car that is fit for purpose. If it’s just a single day booking then the full cost can go against the profit and loss account I might also add (along with the 100% VAT reclaim).

While this is fine for businesses with irregular business travel requirements, what about those small businesses that have sales staff or engineers out on the road? Let me give you two scenarios.

Here’s the first. Business A has six sales staff. They drive in their own private vehicles and the company reimburses them only 30p per mile for each business mile driven under the tax-free Approved Mileage Rate (AMAPs) scheme – the additional tax-free 10p per mile staff have to claim on their personal tax returns. A condition of employment is to include business insurance on their car cover. Average mileage is 7000 miles a year.

Here’s the second. Business B has six engineering staff. They have company provided estate cars and fuel cards. Private mileage is deducted from their monthly wages using the Advisory Fuel Rates. A condition of employment is a yearly driving licence inspection and a monthly filed report on car condition. Average mileage is 12,000 miles a year.