May 12, 2026
Carpooling to Work: How to Set It Up for Your Team (2026 Guide)
Every day, millions of employees drive to work alone. Empty seats, congested roads, and unnecessary emissions …
Grey Fleet Management in 2026: The Complete UK Guide
Everything published about grey fleet tells you to check licences, MOTs and insurance. All of that is necessary. None of it addresses the fact that, since April 2026, every grey fleet mile costs you 22% more than it did — and that the cheapest, safest, lowest-emission grey fleet mile is the one nobody drives.
Most organisations can tell you how many company cars they run. Very few can tell you how many employee-owned cars were driven on company business last month. That second, invisible fleet is your grey fleet, and for many employers it is larger, older, more expensive and less controlled than the fleet they actually own.
In April 2026 it also got significantly more expensive. This guide covers what a grey fleet is, who counts as a grey fleet driver, what the law requires of you, and — the part the rest of the industry skips — how to make the whole thing smaller.
What Is a Grey Fleet?
A grey fleet is the collection of privately owned vehicles that employees use for work journeys, rather than vehicles owned or leased by the employer. It includes privately owned cars, personally leased vehicles, and cars acquired through a cash-for-car allowance.
What counts as a grey fleet journey:
- Driving to a client meeting, a supplier or a site visit
- Travelling between company offices or depots
- Any trip where the employer pays a pence-per-mile mileage allowance
- Collecting equipment, stock or post on the organisation’s behalf
What does not count:
- The ordinary daily commute from home to a single permanent workplace
- Genuinely personal journeys taken in the employee’s own time
That commuting exclusion matters for tax and compliance purposes, but do not read too much into it operationally: the employee driving 30 miles to head office three days a week and 30 miles to a second site on Thursdays is a grey fleet driver on Thursdays only — while the vehicle, the road risk and the traffic are identical on all four days.
Who Is a Grey Fleet Driver?
A grey fleet driver is any employee who drives their own vehicle on a business journey — regardless of job title, seniority or how often they do it.
This is the single most common misconception in the field. Grey fleet is not a sales-team problem. If an HR business partner drives between two offices for a disciplinary hearing, a community nurse visits patients, or a marketing executive drives to a conference and claims the mileage, each of them is a grey fleet driver for that journey, and your duty of care as an employer applies in full.
The practical test is simple: if you reimburse the mileage, it is a grey fleet journey. Most organisations that believe they have no grey fleet simply have not looked at their expenses system.
How Big Is the UK’s Grey Fleet?
Research produced by the Energy Saving Trust for the British Vehicle Rental and Leasing Association put the scale into perspective:
| Measure | Figure |
|---|---|
| Grey fleet cars in the UK | ~14 million — around 40% of vehicles on the road |
| Average age of a grey fleet car | 8.2 years |
| Business miles driven annually | ~12 billion |
| Annual cost to private sector | ~£5bn across 11 billion miles |
| Annual cost to public sector | ~£786m across 1.5 billion miles |
| CO₂ from private-sector grey fleet | 3.2 million tonnes |
The age figure is the one to sit with. A fleet averaging 8.2 years old is materially older, more polluting and less well equipped with modern safety systems than a typical company car fleet — and it is being driven on your business, under your duty of care, largely outside your visibility.
The 2026 Change: Why 55p Rewrites the Business Case
For fifteen years, the Approved Mileage Allowance Payment (AMAP) rate sat at 45p per mile. That changed in 2026.
From 6 April 2026, the AMAP rate for cars and vans rose from 45p to 55p per mile for the first 10,000 business miles in a tax year. The change was announced in May 2026 and backdated to the start of the tax year — the first increase since 2011, and a 22% uplift.
The full 2026/27 approved rates:
| Vehicle / payment | Rate |
|---|---|
| Cars and vans, first 10,000 business miles | 55p per mile |
| Cars and vans, over 10,000 business miles | 25p per mile |
| Motorcycles | 24p per mile |
| Bicycles | 20p per mile |
| Passenger payment (per fellow employee carried) | 5p per mile |
Two things are widely misunderstood about these figures, and both matter for budgeting.
These are tax-free maximums, not obligations. AMAP defines the most you can reimburse without triggering Income Tax and National Insurance. You are not legally required to pay 55p. If you pay less, the employee can usually claim Mileage Allowance Relief on the shortfall — which means the pressure to move to 55p is real, but it is commercial pressure, not a statutory duty.
The passenger payment did not go up. It remains 5p per mile per passenger. There is no Mileage Allowance Relief for it, so if you do not pay it, your employees cannot reclaim it.
The combined effect is straightforward: driving alone got 22% more expensive, while sharing a journey did not. Any organisation reimbursing significant grey fleet mileage has just absorbed a substantial cost increase, and the relative value of every shared journey has risen with it.
Your Legal Duty of Care
Employers consistently underestimate this, so it is worth stating plainly.
You owe employees driving their own vehicles on business the same duty of care you owe employees driving company vehicles. The Health and Safety at Work etc. Act 1974 requires employers to ensure, so far as is reasonably practicable, the health and safety of employees at work — and the Health and Safety Executive is explicit that health and safety law applies to on-the-road work activities exactly as it does to all other work activities. HSE guidance INDG382, Driving at work, applies to employees using their own vehicles for work-related journeys.
Under the Corporate Manslaughter and Corporate Homicide Act 2007, a fatal collision on a work journey can expose the organisation itself, not only the individual driver.
In practice, “reasonably practicable” means being able to evidence that you have:
- Verified the driver — a valid, current licence, checked at a defined frequency, with endorsements reviewed
- Verified the vehicle — valid MOT where applicable, current road tax, and roadworthiness
- Verified the insurance — cover that explicitly includes business use; ordinary social, domestic and pleasure cover does not extend to work journeys
- Assessed the risk — a documented risk assessment covering work-related road risk, including journey distance, timing and driver fatigue
- Set standards — a written policy stating what is and is not acceptable
The insurance point causes the most trouble in practice. A large share of employees driving on company business are covered only for social, domestic and pleasure use — a gap neither they nor their employer discovers until a claim is refused.
Related reading: the boundary between a commute and a work journey also determines pay and liability. See our guide to commute vs working time and employer obligations .
What a Grey Fleet Policy Should Contain
A grey fleet policy converts the duty above into something auditable. At minimum it should define:
- Which journeys qualify as business travel, and which do not
- Pre-travel evidence — licence, MOT, road tax and business-use insurance, with a stated re-check cycle (annually at minimum; six-monthly for high-mileage drivers)
- Vehicle standards — maximum vehicle age, minimum safety specification, any emissions floor
- Reimbursement rates — the mileage rate you pay and whether you pay the 5p passenger payment
- Approval and recording — who authorises a journey and how mileage is evidenced
- Driver responsibilities — reporting endorsements, notifying insurers, fitness to drive
- The travel hierarchy — and this is the clause most policies are missing: when should an employee not drive alone at all?
That last point is where most grey fleet policies stop short, and it is where the money is.
The Four Levers — and the One Nobody Sells
Read the grey fleet guidance published by fleet management, telematics, leasing and licence-checking providers and you will notice something: almost all of it addresses the same three levers.
| Lever | What it does | Effect on risk | Effect on cost |
|---|---|---|---|
| 1. Verify | Licence, MOT, tax and insurance checks | Reduces per-journey risk | Adds administrative cost |
| 2. Reimburse | Get the mileage rate and records right | Neutral | Controls, but does not reduce, spend |
| 3. Replace | Move journeys to pool cars, hire or rail | Transfers risk to a managed fleet | Substitutes one cost for another |
| 4. Reduce | Remove journeys — chiefly by sharing them | Eliminates the risk entirely | Removes the cost entirely |
Verification is essential and non-negotiable. But notice what it actually achieves: it makes a journey safer and better documented. It does not make the journey not happen, and it adds administrative overhead per driver.
Lever four is the only one that removes cost and risk together, and it is almost entirely absent from the market — for an obvious commercial reason. There is no product to sell a company in a journey that never takes place. Licence-check subscriptions, telematics units and lease contracts all scale with the number of grey fleet drivers and vehicles. Reducing the grey fleet shrinks the market for managing it.
That does not make the first three levers wrong. It does mean nobody is likely to tell you about the fourth.
The Reduce Lever: What Sharing Is Actually Worth
Here is the arithmetic that changes budgets, using the 2026 rates.
Scenario: three employees travel from your Manchester office to your Birmingham site for the same meeting. It is an 80-mile round trip each. Today, all three drive their own cars.
| Three separate cars | One shared car | Change | |
|---|---|---|---|
| Grey fleet miles driven | 240 | 80 | −67% |
| Mileage reimbursed at 55p | £132.00 | £44.00 | −£88.00 |
| Passenger payments at 5p | £0.00 | £8.00 | +£8.00 |
| Total employer cost | £132.00 | £52.00 | −£80.00 (−61%) |
| Employee vehicles on a work journey | 3 | 1 | −67% |
| Driver’s additional tax-free income | £0.00 | £8.00 | +£8.00 |
One shared journey saves the employer £80 and pays the driver £8 tax-free. Nobody loses.
Note what the 2026 rate change did to this calculation. At the old 45p rate, the same shared trip saved £64. At 55p it saves £80 — the value of each shared journey rose by 25% while the cost of doing nothing rose by 22%.
Scale it conservatively. An organisation with two sites where three employees make a shareable inter-site trip twice a week, 46 weeks a year:
92 trips × £80 = £7,360 saved per year, on one route, before counting anything else.
And the savings that do not appear on the mileage line are arguably larger:
- Duty-of-care exposure falls with vehicle count. Two fewer employee-owned cars on that journey means two fewer sets of licence, MOT and insurance risk in play, and two fewer opportunities for a collision on company business.
- Compliance admin falls. Fewer active grey fleet drivers means fewer records to verify and re-verify.
- Emissions fall roughly in proportion. With grey fleet cars averaging 8.2 years old, these are among the most carbon-intensive miles your organisation is responsible for. Removing two thirds of them is a real, evidenced reduction you can put in a carbon reduction plan or Scope 3 disclosure.
- Parking pressure falls at the receiving site.
Is Sharing a Journey an Insurance Problem?
This is the first objection every employer raises, and the answer is reassuring.
Grey fleet drivers need business use cover for work journeys regardless of whether they carry anyone. Carrying colleagues on that same business journey does not normally convert it into hire or reward — the category that requires taxi or courier insurance — because no profit is being made. The Association of British Insurers has confirmed that cost-sharing arrangements where money changes hands only to cover costs do not affect cover.
HMRC passenger payments sit comfortably inside that principle: 5p per mile is a reimbursement paid by the employer, not a fare paid by the passenger. Drivers should still notify their insurer of the arrangement, and it is worth confirming the position with your own broker and stating the outcome in your policy — which removes the objection permanently.
Why “Just Share Cars” Doesn’t Work on Its Own
Every organisation that has tried to encourage journey sharing by email knows the failure mode. The intention is universal; the coordination is impossible.
To share a trip, an employee must know — in advance — that a colleague is travelling to the same place at roughly the same time, and be willing to ask. In an organisation of any size, spread across sites and teams, that information simply does not exist anywhere. Calendars show meetings, not journeys. Expenses systems find out weeks later. The result is three people discovering they drove the same route only when they meet in the car park.
This is a matching problem, and matching problems need a system, not a poster campaign.
There is a related trap worth naming. Making pool cars bookable — through Exchange room and equipment mailboxes , the native Microsoft 365 approach — is genuinely useful for lever three. But a calendar booking is an exclusive lock on a vehicle: it has no concept of the four empty seats in the car it just reserved. Solve booking alone and you get three colleagues each reserving a separate pool car for the same trip. You will have moved the journeys off the grey fleet without reducing them.
Making the Reduce Lever Work
The requirement is narrow: employees need to know who else is making their journey, before they set off, without asking anyone.
TeamWheels does this inside Microsoft Teams, which matters more than it sounds. Grey fleet reduction fails when it depends on a separate app nobody opens; it works when the prompt appears where employees already are.
In practice:
- An employee tells the TeamWheels bot they need to reach another site on a given morning.
- It matches them against colleagues already making that journey — in their own cars or in pool vehicles.
- The driver approves the request in one tap, and a journey that would have been three cars becomes one.
- If no match exists, the trip is logged and immediately becomes a matchable option for the next colleague who asks.
- Every shared journey is recorded with distance, occupancy and passenger count — which is exactly the evidence your finance team needs for passenger payments and your sustainability team needs for reporting.
That last point closes an awkward gap. The 5p passenger payment is only claimable if you can evidence who was carried and for how many miles. Most organisations do not pay it simply because they cannot prove it — leaving a tax-free benefit unclaimed by the very employees they want to encourage.
Deployment is a Teams admin consent, measured in minutes rather than an IT project. Employees authenticate with their existing work account, and the data stays in your own Microsoft 365 tenant. See how it works →
A 90-Day Grey Fleet Plan
Days 1–30 — Measure what you actually have. Pull twelve months of mileage claims from your expenses system. Count distinct claimants, total business miles, and cost at both 45p and 55p so the increase is explicit. Then do the analysis almost nobody does: sort claims by date and destination, and count how many times two or more employees claimed the same route on the same day. That number is your reduction opportunity, and it is usually larger than anyone expects.
Days 31–60 — Close the compliance gap. Verify licence, MOT, road tax and business-use insurance for every active grey fleet driver identified in month one. Publish or refresh your grey fleet policy, including the travel hierarchy clause and your confirmed insurance position on carrying colleagues.
Days 61–90 — Turn on matching. Deploy journey matching on your highest-duplication route first, not everywhere at once. Start paying the 5p passenger payment and say so loudly — it is a tax-free benefit that costs you a fraction of the mileage it displaces. Report the change in miles, cost and vehicle-journeys against your month-one baseline.
Then repeat the duplication analysis quarterly. It is the single most useful grey fleet metric almost nobody tracks.
The Short Version
A grey fleet is every employee-owned vehicle driven on your business, and it is almost always bigger than you think. Your duty of care over it is identical to your duty over company cars, so verification of licence, MOT, tax and business-use insurance is not optional.
But verification is where the industry stops, and 2026 is a poor year to stop there. With AMAP at 55p, the cost of every solo grey fleet journey rose 22% overnight while the 5p passenger payment stayed put. Three colleagues sharing an 80-mile round trip instead of driving separately saves an employer £80, hands the driver £8 tax-free, and removes two employee-owned cars from a work journey along with roughly two thirds of its emissions.
Check the drivers you have. Then get to work on having fewer of them on the road.
Ready to Shrink Your Grey Fleet?
TeamWheels matches colleagues travelling the same route inside Microsoft Teams, so duplicate journeys stop happening — and every shared trip is recorded for passenger payments and ESG reporting.
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This guide is general information, not legal, tax or insurance advice. Mileage rates and compliance obligations change — confirm current figures with HMRC and your own advisers before acting.
Published by TeamWheels Editorial · September 3, 2026
Tags: grey fleet · grey fleet management · grey fleet driver · grey fleet policy · grey fleet insurance · AMAP 55p · HMRC mileage rates 2026 · passenger payment · duty of care · driving at work · business mileage · corporate carpooling · Microsoft Teams · TeamWheels
