In certain companies it is now possible to exchange a company car, used for personal travel, for a mobility allowance (cash for car). However, this is subject to certain requirements that relate to the period that the employee has received a company car for its use. For the employees who are changing jobs a special arrangement has been set up.
The mobility allowance is a sum of money an employee will receive in exchange for his company car. This is treated in the same way both fiscally and socially.
It is important to know that the introduction of a mobility allowance is the sole decision of the employer.
1. How can you introduce a mobility allowance as an employer?
You can only introduce a mobility allowance if you have already made at least one company car available to at least one employee during an uninterrupted period of at least 36 months.
But what if you haven't been active for 36 months yet as an employer? In that case the requirement does not apply to you, assuming that at least one of your employees have a company car available to them at the moment you want to introduce the mobility allowance.
When introducing the mobility allowance, employees must be informed of the conditions that you as an employer attach to it.
2. How can your employee request a mobility allowance?
The employee can only make the request as soon as they have had a company car available to them for an uninterrupted period of at least 3 months, and if they have or had a company car available to them for at least 12 months during the 36 month period before the request was made.
However, there exists a special arrangement for employees who are changing jobs (employers).
3. Special arrangement
Employees who are changing jobs, can transition faster into the mobility allowance. And if they were already receiving a mobility allowance, it is possible to continue this regime with their new employer without having to meet the conditions again.
This is only possible in the following cases :
1° they were receiving a mobility allowance at their previous job.
2° they had access to a company car for at least 12 months during the 36 month period prior to the application and for at least three months without interruption prior to leaving the employment. If you have not yet been active for very long as an employer, the exceptions listed above will apply.
3° they had access to a company car while working for their previous employer for less than 12 months immediately prior to their leaving the employment. In that case they can continue and complete this period while working for their new employer.
4. If this is the case, which formalities must be completed?
The employee must submit a written application for the introduction or continuation of the mobility allowance no later than 1 months after his entry into service.
They must then provide their new employer with a company car certificate.
Said certificate must be received from their previous employer at the end of their employment contract at the latest.
As a new employer you will be free to accept or reject this application, however you must confirm your decision in writing to the applicant.
The formal application of your employee and your positive decision to accept it are in themselves an agreement that forms part of the employment contract between both parties. This agreement must be concluded prior to the first payment of the mobility allowance and it must specify, amongst other things, the basic amount of the mobility allowance.
Note! If the employee had multiple company cars available, the mobility allowance will only apply to one vehicle.
5. The company car certificate must contain the following information:
- the amount of time the company car was available to the employee;You can contact our office for assistance and guidance in your dealings with the United Kingdom.
- the catalog price;
- the CO2-emission in gr/km;
- the type of fuel;
- whether the cost of fuel for private use was borne in whole or in part by the employer;
- any contribution paid by the employee during the last month before the return of the vehicle;
- whether the allocation of the car was linked to the replacement or conversion of wages or other benefits;
- the amount of the mobility allowance that the employee received at the end of the employment contract;
- all the elements on which the mobility allowance was determined;
- the date on which the employee handed in the company car in exchange for the mobility allowance.