Or ring ☎ 0161 388 2552 (office hours)
Understanding why the company car was seized
When a company car is taken to a pound, the first step is to confirm the exact reason for the seizure. Police and council pounds record the grounds clearly, and those grounds often decide who pays the release fee. A company vehicle might be impounded because of no insurance, expired tax, MOT issues, suspected offences, or the way it was being driven. The circumstances matter, because responsibility can fall on the employer, the driver, or a mixture of both.
When the employer usually pays the release fee
In many cases, the company is responsible for settling release and storage fees. That’s because employers typically manage the legal and administrative obligations for their fleet, such as tax, MOT, insurance arrangements, and maintenance. If the car was impounded due to an oversight in these areas, the employer normally accepts liability because they control the systems that should have kept the vehicle compliant.
Examples include:
- Insurance not updated correctly or missing from the Motor Insurance Database
- An MOT that lapsed without being renewed
- Tax not paid because of a clerical or renewal error
- A defect reported by the driver but not repaired
In these situations, it’s difficult for an employer to argue that the driver should shoulder the costs, because the underlying responsibility sits with the business.
When the driver may be held responsible
There are circumstances where a company expects the driver to pay, particularly if the seizure relates to driving behaviour or the driver’s own decisions. A business can only hold an employee financially liable if their employment contract or fleet policy clearly states this. Even then, deducting money from wages requires proper agreement and documentation. The driver may be responsible when the impound is tied to actions they controlled directly.
Common examples include:
- Driving the vehicle without authorisation
- Using the car for purposes outside business rules
- Ignoring defects or dashboard warnings when the issue became unsafe
- Driving in a manner that led to police seizure for an offence
If the company believes the driver caused the incident through misuse or breach of policy, they may ask the driver to cover or contribute to the fees. Whether this is enforceable depends on employment law and the exact wording of internal policies.
Joint responsibility in grey-area cases
Some situations sit in the middle, where both the employer and driver have duties that overlap. For example, a vehicle may have been impounded because a fault was reported but not described clearly, or because the driver wasn’t aware the MOT or tax had expired. In these cases, companies often handle fees centrally to avoid disputes, then review their internal processes afterwards.
Many businesses treat it as an operational issue: they cover the costs immediately to limit storage charges and downtime, then decide later whether internal action is needed. The priority is usually to recover the vehicle, minimise costs, and get the fleet operational again.
Insurance considerations after an impound
If a company car is impounded for no insurance, the business normally has to arrange suitable cover before the car can leave the pound. Specialist impound release insurance may be required if the original policy has been suspended or does not meet release conditions. Once that policy is active, the company can choose a staff driver, recovery company, or fleet manager to collect the vehicle. If the driver’s conduct led to the issue, some companies restrict who is allowed to collect it.
How storage and release charges fit into fleet budgets
Storage fees build up daily, so companies usually act quickly to keep the cost manageable. Larger fleets often build impound fees into contingency budgets because the occasional seizure can happen even with good systems. Smaller companies may feel the financial impact more strongly and place tighter rules on drivers to prevent repeat incidents. Whatever the approach, most businesses aim to recover the vehicle quickly so that operational disruption is minimal.
What to check once the vehicle is released
After fees are paid and the vehicle has been collected, the company should log the incident and inspect the car. If defects led to the seizure, repairs will need to be completed before the car returns to service. If the impound followed an enforcement stop, the company may need to review maintenance schedules, driver training, booking processes or insurance procedures. Proper documentation also supports future compliance checks by enforcement bodies.
Clear communication prevents disputes
The simplest way to avoid arguments between employers and drivers is to keep fleet policies up to date. When both sides know who is responsible for tax, MOT, insurance checks, and defect reporting, the question of who pays the release fee becomes much clearer. A written policy also helps when drivers use pool cars or temporary vehicles, as responsibility can easily become blurred.
Bringing it together
Responsibility for impound fees depends on why the vehicle was seized. Failures in paperwork or maintenance usually fall on the employer; misuse, unauthorised driving or rule breaches may shift responsibility to the driver. Many companies pay the fees first to stop costs rising, then deal with internal matters later. Clear procedures, accurate paperwork and good communication are the best ways to prevent the situation happening again.
Impound processes, time limits and costs vary widely across the UK, and authorities can amend their rules at any time. Information on this site is intended as a general overview and should not be relied on as definitive for any specific impound location.