Executives clocking up thousands of pounds in penalties are causing major
headaches for employers, with one high-ranking manager in a FTSE 100 company
incurring £3,400 in penalty charges in a year.
Violations range from parking illegally to speeding and driving in bus lanes.
But the biggest problem is non-payment of the London congestion charge.
Although companies can register vehicles so that they are automatically
billed when a car enters the congestion zone, this is only available to fleets
over a certain size. And some companies admit that, even if they qualify, they
haven’t got the resources to manage the scheme and therefore haven’t signed up.
Although the wisdom of such an approach can be questioned, some executives
are driving finance departments to distraction, as they repeatedly incur fines,
using the excuse that they are too busy to either pay, or remember to pay, and
too important to worry about the consequences.
SETTING A FINE EXAMPLE
A source at a leading FTSE 100 company revealed that one high-ranking
executive had incurred fines of nearly £3,400 in a year, an amount that was
eventually clawed back from his salary, but only after hours spent dealing with
the paperwork involved.
The source, who asked not to be identified, but who is based in the company’s
finance department, said: ‘If he wasn’t such a senior member of the company I
would have requested disciplinary action be undertaken. It isn’t an isolated
case either. There are other drivers who incur fines, particularly congestion
fines, and claim they keep forgetting to pay.’
Since its introduction, the congestion charge has been a success at reducing
the number of vehicles going into London. The charge was first introduced in the
capital in February 2003 and has been credited with reducing congestion in
central London by 30%, or 70,000 vehicles.
But it has also been a nightmare for employers, particularly finance depar
tments, which bear the brunt of the cost and paperwork from fines. Even if they
recover the cost from the driver, they still have to waste hours managing the
Research among contract hire and leasing companies on the cost of congestion
charging fines showed that the bill ran into millions of pounds. The annual
FN50, the industry guide to Britain’s largest leasing companies, found that
annual congestion charging fines were at least £3.54m, equivalent to 70,800
penalties of £50. In addition, the fine increases if it isn’t paid promptly, and
leasing companies normally charge an administration fee, which can be about £25.
Ignorance is as great a danger as the self-importance of senior executives,
with one driver in Stevenage, just outside the capital, driving into the zone
without paying five times in a week and incurring £250 in charges. Her excuse
was that she didn’t know about it.
A CAPITAL IDEA
For employers throughout the country, it serves as a warning, as congestion
charging or road pricing becomes widespread. Cities throughout the UK have
examined the potential for congestion charging to reduce traffic, although
enthusiasm was dampened after the failed attempt to introduce it in Edinburgh.
Three-quarters of voters in Scotland’s capital – more than 133,000 people –
were against the £2 daily charge plan. Only 45,000 people supported the
Planning chiefs in cities including Bristol, York, Leeds, Southampton,
Manchester and Cardiff are believed to have followed the outcome closely as they
assessed its impact on their plans.
Lobby group Transport 2000 said the decision was a defeat ‘for those who
could see a better future for the city from less traffic and better public
At the time, director Stephen Joseph said: ‘This is a setback for Edinburgh,
but does not mean the end of city centre congestion charging as an idea. It does
mean councils elsewhere will have to work harder to explain the benefits.’
Welcoming the result, Association of British Drivers spokesman Nigel Humphries
said: ‘This is a blow to the government’s road pricing plans.’
But in the long term, some form of congestion charging for all business
motoring seems inevitable, with government plans to introduce road pricing.
Local authorities have been told that extra funding is available to set up
congestion charging schemes in the government’s The Future of Transport: Network
for 2030, which spells out how it sees the transport infrastructure developing
over the next three decades including road tolls. It would be wise to stop the
This is an edited version of an article that first appeared in Financial
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