This is a deduction from salary and is only permitted if you have agreed to it or its a contractual term. So the key will be if you agreed to it in the paperwork of getting your car, your contract etc. Even then it can be challenged

Its not a policy I agree with and I think its better dealt with by training or the disciplinary policy.

Hi Mat and welcome to the forums.
Good practice would call for en employer to advise staff of their responsibilities/liabilities at the time they take possession of a company car. Most companies provide a booklet explaining the rules and ask staff to sign acceptance of them.
Unless you hve signed a document authorising it, your company cannot make a deduction from salary for the excess - that would be an unlawful deduction from salary - however in absolute terms they could potentially pursue you in the the civil courts for the damage for which they hold you responsible..
In my experience, it is not uncommon for companies to expect staff to pay the excess in the event of a claim, although practices vary.
Pragmatically, you have been involved in an accident with a piece of company property in your possession, and unless there is a clear "no-fault" situation it would not unreasonable for the company to expect you to contribute to some of the costs incurred.
Finally, think about how you want to handle any challenge, what you want to achieve, and the relationship you might have after any challenge

In reply to Keith:

Keith... 12,000 and counting. You really are Mr Endurance 

In reply to Ray:

Thank you for your thoughts, very helpful. As I said I wouldn't mind if I had been aware of the existance of the excess. I could have arranged to cover this via a small excess insurance policy. I think I will write to HR and ask if I can see a copy of the signed agreement. If they are unable to produce this I will advise them that I do not authorise them to deduct any monies from my salary.

In reply to Ray:

Ray Naylor said:

Pragmatically, you have been involved in an accident with a piece of company property in your possession, and unless there is a clear "no-fault" situation it would not unreasonable for the company to expect you to contribute to some of the costs incurred.

Thats where we, on this one, disagree Ray. I think it is unreasonable and we often don't expect employees to do it for any other damage to company property (say a broken phone screen). sadly s#car accidents happen and that's why insurance is compulsory. Passing the cost on is, for me, both unfair and probably counter productive.

In reply to Matthew Chapman:

I've just recieved this update from my line manager:

Hi Mat,

I have looked further into this on your behalf – both from an HR and Finance/Motor perspective. If you refer to page eight of the policy attached, it states;

The driver will be eligible to pay the first £500 of any claim if it is the driver or his approved driver who is at fault and found to be liable

In this case as you were at fault you will be required to pay the excess. Group are tightening up on this and will be sending a note out in the next week or so to  make people aware.

Also, in your employee contract there is reference to the car policy and duty of care/adherence to the car policy.

9.1 In accordance with the car scheme rules in force from time to time, the Company will provide you with a company car appropriate to your responsibilities and position in the Company as the Company shall at its absolute discretion determine.  

The company car shall be mainly for your business use but also for your private use.  The Company shall meet all normal running expenses associated with the car such as road tax, insurance, repairs, and servicing; other costs to be reclaimed via the Company’s expense policy and procedure.  Replacement of company cars is normally made every four years but is subject to prior approval.  You agree to take good care of the company car and agree to ensure that the provisions and conditions of such company car policy as the Company may have in force from time to time, and any policy of insurance relating to the company car, are complied with in all respects at all times.  This includes providing on a regular basis suitable evidence of your ability to drive by way of submission of your licence details together with the licence details of any family member authorised to drive the vehicle.

I’ve checked the process, at least present day, and the policy is now sent out via HR and Finance to all new company car owners.

Finance have advised there is the option to make  the payments over 12 months if this would be helpful.

This response from the company seems to ommit the fact I was never given sight of the policy, instead it seems to imply that I am bound by the terms in my contract of employment, putting the emphasis on me to locate the policy which was not readily available.

Any other thoughts welcome

In reply to Keith:

We'll agree to differ on this Keith. My experience has been that where companies require a contribution to covering the "excess" when a driver admits to a fault, then claims tended to be less frequent. YMMV

In reply to Ray:

Context is another factor to take into account - in large companies the risk of accidents is spread across multiple company car drivers. In small companies the cost impact on the company of a company car driver having an accident is potentially much greater. In a recent case I advised on in a small business ( 15 employees) the impact of an insurance claim following an accident resulted in an increase to the insurance premium of £3k per annum. In this context an employee picking up the excess of say £500 ( via payroll deduction) does not seem unreasonable.

In reply to Kevin Elvidge:

We would only advise that this be done where the policy is very clear and our policies would always say something about repeated accidents not first 'offences'.

I think now they would/will say something like.

You may decide to take out opt-out insurance from a reputable insurance agent to insure against such an excess being charged.