How to avoid an HMRC business mileage nightmare
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Is your business mileage HMRC compliant?
Businesses across Britain have been forced to pay fines and penalties totaling hundreds of thousands of pounds to HMRC tax investigators – because they’ve been found to be keeping inadequate records of business mileage.
A recent wave of investigations by tax officials has revealed that most companies are not monitoring their staff’s split between business and private mileage properly. It means that recording business mileage has become one of the top “risk areas” of employment tax, according to tax advisers Grant Thornton.
Thankfully, there is an easy solution for fleet managers struggling to keep tight control of staff mileage records. Allstar offer customers the Business Mileage Monitor (BMM) system to work alongside any of our fuel cards.
BMM is an automatic online process that allows any company to record individual fuel expenses accurately. It creates an accurate HMRC-compliant audit record of the split between business and private mileage and will reduce the time spent on record keeping and processing claims.
The Allstar BMM system is available at a time when transport industry surveys have found that not one business's individual business mileage recording system checked by independent experts was 100% compliant with HMRC rules. That is supported by a surge in reported cases of HMRC clamping down in this area.
One southern English company has been fined a million pounds for mileage record discrepancies associated with around 1,000 drivers. Another had to pay £500,000 after an HMRC inspection of mileage claims relating to 20 company cars was extrapolated across the organisation’s 300-strong fleet.
Poor mileage record keeping uncovered by tax inspectors included employees overestimating business mileage with employers having no evidence on record and ‘positive rounding’ with employees usually recording trips that end in ‘0’ or a ‘5’.
If your current system falls foul of an HMRC investigation, it could mean a demand for unpaid taxes and a penalty that could be as much as £6,000 per driver a year - and HMRC can go back six years.
Allstar’s BMM system immediately protects you against disasters like that. It’s quick to set up, easy to run and eliminates the need for receipts. Find out more here.
Apply for an Allstar fuel card and add BMM to your account now.