# Grey fleet explained

> What grey fleet means, the duty of care and insurance checks an employer owes, the 2026 mileage rates, and when a company van beats paying mileage.

Source: https://fleetme.co.uk/guides/grey-fleet-explained

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# Grey fleet explained

By [the FleetMe team](https://fleetme.co.uk/about) · Updated 14 October 2026 · 10 min read

The short answer

**Grey fleet means employees driving their own vehicles for work. Your duty of care still applies, so licence, insurance and roadworthiness must be checked, and at 55p a mile, reimbursement adds up faster than most businesses expect.**

## What counts as grey fleet?

## Does duty of care really apply to someone else’s car?

## What do you actually have to check?

## What is the insurance problem with grey fleet?

## What can you pay, and what is taxable?

## When does a company van cost less than paying mileage?

## What are the hidden costs of running on grey fleet?

## How do you reduce grey fleet without banning it?

## This is general information, not tax or legal advice

## Put a price on it

Tell us the vehicle, the term and the annual mileage you need and we come back with a written quote, and we aim to do that the same working day. Rentals are quoted ex VAT with the VAT-inclusive figure alongside, and your agreement is with FleetMe.

How many vehicles do you need?

Takes a minute. No obligation.

## Enquiry received, one step to go.

We can put a guide figure together from what you ve told us. To confirm the vehicle, the monthly rental and a delivery date **in writing**, we need your business details and the underwriting information.

Next step · about 5 minutes

Complete your business application

It s pre-filled from your answers. Nothing is committed until we confirm your quote and you sign.

No obligation · About 5 minutes

Prefer to leave it there? We ll still be in touch about your enquiry.

## FAQs

### What is a grey fleet?

Vehicles used for work journeys that the business does not own or lease, typically employees’ own cars and vans, and vehicles bought with a cash allowance. Ordinary commuting is not a work journey, but travel to a temporary workplace, to customers or between sites is.

### Is an employer responsible for an employee’s own car used for work?

For the work journey, yes. The Health and Safety at Work etc. Act 1974 duties apply regardless of who owns the vehicle, and the joint HSE and DfT guidance INDG382 expressly covers employees using their own vehicle for a work-related journey. You must assess driver, vehicle and journey.

### What is the HMRC mileage rate for 2026/27?

55p per mile for the first 10,000 business miles in the tax year and 25p per mile above that, for cars and vans; 24p for motorcycles and 20p for bicycles (gov.uk, updated 21 May 2026). This was the first change to the car and van rate since 2011, when it was set at 45p.

### Do employees need business use on their insurance?

Yes, for any work journey beyond ordinary commuting. A standard private policy covers social, domestic and pleasure use and usually commuting only. Ask for the schedule showing the class of use rather than accepting a verbal assurance, and refresh the evidence annually.

### How do I check an employee’s driving licence?

The employee generates a check code at the GOV.UK view or share your driving licence information service and gives it to you with the last eight characters of their licence number. The code lasts 21 days and shows entitlement, endorsements and disqualifications. Record the date you checked.

### Can I reclaim VAT on mileage paid to employees?

A VAT-registered business can reclaim the VAT on the fuel element of a mileage payment, calculated using HMRC’s advisory fuel rates, provided it holds VAT receipts for the fuel bought by the employee (HMRC VAT Input Tax manual, VIT55400). The rest of the payment carries no recoverable VAT.

### At what mileage does a company vehicle beat paying mileage?

It depends on the vehicle and your VAT position, but the reimbursement side is easy to calculate: 12,000 business miles costs £6,000 a year at the approved rates and 20,000 costs £8,000. Put your real per-driver mileage next to a written quote rather than comparing figures in your head.

## Next step

Business van leasing →

How the monthly rental is built, what is included, and who business contract hire is for.

Business van leasing eligibility →

The honest answer on who gets considered, and what we look at when we assess a business.

Or go straight to the range: [browse vans and pickups](https://fleetme.co.uk/vans) · [company cars](https://fleetme.co.uk/cars)

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