Here at the Co-op we want to make sure you’ve got the tools to do your job. So, we’ll give you a car if your job means that you need to drive significant business miles.

Crucial bits

If you’re given an essential user car, it’s important that you also follow the Co-op Driving Policy and the Vehicle Users’ Handbook which you’ll get with your car.

Just so it’s clear, essential user cars aren’t a contractual benefit and are only given for certain roles.


You’ll be eligible for an essential user car if:

  • Your job is Work Level 5 or 6 and we expect you’ll need to drive at least 10,000 business miles a year
  • Your role has been designated by Reward as needing to frequently and regularly travel for business

Just so everyone’s clear, there isn’t a cash allowance alternative to having an essential user car.

If you’ve already got an essential user car, we’ll review whether or not you continue to be eligible for one when your lease expires. We might also review it at other times if the requirements of your job change significantly.

If you change jobs, for whatever reason, we’ll look at whether or not you’re still eligible for a car. If your new job qualifies for a car, then you’ll keep the car you’ve got until the lease expires. If not, then your car should be returned to Group Fleet.

Types of car

The cars available will depend on your Work Level. We use a small number of manufacturers and the cars available are all suitable for being driven for business as well as for standard personal needs.

When you choose your car, you can have metallic paint if you like and you can add a tow bar if within the allowance limit but you can’t pick any other optional extras. You can get roof racks/boxes and bike racks fitted, but you’ll need to pay for this – and you’ll need to get agreement from Group Fleet before you do it.

We’ll usually be able to give you a choice of car, but sometimes we might need to give you a car that’s already been leased and is in the ‘pool’, until the lease expires.

Co-op vehicles are usually leased for 4 years. If you’ve got an Essential User car, you’ll be expected to keep it until the end of the lease. You can’t get a new vehicle if you exceed the projected mileage. So, it’s important that you give us accurate information about your likely mileage when you place your order, to help Co-op manage costs to the business.

  • Ultra-Low Emitting Vehicles (ULEV)

Co-op wants to encourage the use of lower emission cars where this is a practical option for your work and personal driving requirements and works financially.

However, a plugin or full electric vehicle might not be suitable for you if you drive a high number of miles – as a guide more than 15,000 a year. If you often do long journeys, you’ll need to consider if the range of the vehicles available to you is enough for your needs. We’ve produced a decision tree and factsheet to help you decide whether this is the right option for you.

You’ll also need to have a suitable place where you can charge the car at home. If you have a ‘plug-in’ car, you’ll need to arrange to have a home charging unit fitted by a qualified installer. Co-op doesn’t pay for the unit or any fitting costs. But you might be able to get a government grant for this.

If you order a vehicle with plug-in capability, then Group Fleet will ask your manager to confirm that it will be suitable for the type of work-related driving you need to do, and that you’re willing and able to have a home charging unit fitted.

You should claim business mileage for a plug-in vehicles using the correct HMRC-approved rate, in line with the Expenses Policy. Co-op will not pay a contribution towards your home electricity bill for charging your vehicle. If you’re claiming for business mileage, you must not use electricity from Co-op premises to charge your vehicle.

  • Choosing a higher cost vehicle

You can choose to pay extra to have a more expensive vehicle. If you’re in Work Level 6, this means you can pay £50 per pay period and choose from the list of vehicles available for Work Level 5 colleagues. If you’re in Work Level 5, you can choose to pay £100 per pay period to choose from the vehicles within the Work Level 4 list.

If you choose to ‘trade up’, the amount that you’ll pay is fixed and just relates to the list the car applies to and isn’t based on specific lease costs. The trade up payment is simply an additional contribution you need to pay towards the private use of the car. ‘Trade up’ payments for private use are calculated as a deduction from your net pay each pay period. You’ll need to sign a form to consent to us making deductions from your salary.
You’ll pay the contribution for the duration of the vehicle allocation. If you leave the Co-op, for reasons other than redundancy or ill-health, before the end of the lease, you’ll need to pay the outstanding ‘trade up’ contributions until the end of the lease period. This will be done via payroll deductions.

Business miles and fuel

You’ll be able to claim for the business miles you drive through expenses – remember to attach a VAT receipt. We’ve put the mileage rates on the intranet. Just so you know, if you claim for a higher rate than you’re entitled and this is paid, then we’ll reclaim any excess amount via payroll deductions.

You can use your car for personal use, but you can’t claim expenses for private miles. You also can’t claim for miles between your home and work. There’s more information in the Travel and Expenses Policy.

Insurance cover and driver risk management

All Co-op cars have fully comprehensive insurance cover, as long as you’ve been authorised to use the car. You’re also insured to carry passengers, for both business and personal journeys.

You and your partner, who needs to live at the same address as you, can use your car. You both need to fill-in the Driver Risk Mandate and this needs to be authorised before you can drive the car. There’s more information in the Driving Policy.


If your car is damaged, no matter how minor the damage or how it was caused, you must report it as soon as you can after the incident. This is so we can make any repairs. Your Vehicle Users’ Handbook has details on how to report damage.

If you don’t report damage but we find it when you return the car, we might charge you a fee towards the repair costs. If you don’t report damage we may also investigate under the Disciplinary/Misconduct Procedure.

We want to encourage colleagues to drive safely and responsibly. So, if repeat and excessive damage is being caused to your car and we can’t recover the full costs from a third party, we’ll investigate this and you might be charged a fee towards the repair costs.


If you’ve got an essential user car, you’ll need to pay tax on this as a benefit in kind. We’ll report this to HMRC in a form P11D in July each year. We’ll make this available to you in June to review before we send them to HMRC – either online or by post.

You need to tell HMRC when you first get a car and if you change cars. You can call HMRC on 0300 200 3300. You’ll need some information to hand

  • Group PAYE reference: 961/ 8200772
  • Your National Insurance number
  • Car make and model
  • List price of car (this will be on the letter sent to you from Group Fleet)
  • Date you got the car

If you don’t call HMRC when you get or change your car, your tax code will only change when the P11D is sent the following July, but of course you’ll still need to pay tax from the date you get the car.

If you want more information about how car benefits are calculated for tax purposes, see

Things to think about

If you don’t want a car

If you don’t call HMRC when you get or change your car, your tax code will only change when the P11D is sent the following July, but of course you’ll still need to pay tax from the date you get the car.

If you want more information about how car benefits are calculated for tax purposes, for more information about this.

If you decide to use your own car, you need to make sure it meets all the required safety standards set out in the [Driving Policy] ( and that you are insured for business use.

Buying your car

If you leave the Co-op before your lease expires, then you might be able to buy your car, but we can’t guarantee this. The purchase price will usually reflect the car’s market value. If we’re charged for ending the lease early, then we’ll pass this cost to you in addition to the purchase price. If you want to buy your car, speak to Group Fleet.

If you need further support

If you have questions about cars, speak to your manager. If managers need advice they can contact ER Services (for questions about the application of this policy) or Group Fleet (for questions about cars).