Avoid the headache of HMRC mileage fines with Fleetmiles mileage capture system
The issue of business mileage expenses is something that can create a headache for employers and employees when analysing and preparing expenses to submit P11D returns to HMRC.
Getting this wrong, especially where the business mileage expenses claims involve company cars, can prove very expensive particularly if an HMRC officer carries out an
employer
compliance
inspection
or
a
Pay-as-you-earn
audit.
Failure to keep accurate mileage expenses may result in expensive company car fuel fines being imposed by HMRC. These can be even more expensive when interest is charged and penalties are added to the bill. Business mileage recording
The most difficult problem in relation to business mileage expenses is around the issue of business mileage recording. Employers may choose a number of different ways to meet the cost of business mileage and where company cars are involved, the risk is much higher because of the potential for HMRC to impose fuel scale charges.
An employer can supply a fuel card or company credit card for the employee to buy fuel for a company car. If private fuel is not to be provided, the employee has to keep accurate mileage records of business and private mileage to calculate the amount to be repaid or made good to the employer if a fuel scale charge is to be avoided.
HMRC considers mileage claims ending in 0 or 5 to be rounded claims and will challenge them.
Business mileage expense claims of directors and employees will come under close scrutiny by HMRC employer compliance officers who may be looking to establish that the claims made do no more than reimburse the cost incurred for genuine business travel. This places importance on the issue of what is business mileage as opposed to non-business or private mileage.
Expenses received by an employee are charged to Income Tax as employment income. Expenses are therefore part of the allowances of the employee. And payments in respect of expenses to directors or employees which are paid by reason of their employment have to be treated as earnings chargeable to Income Tax as employment income with the exception of any expenses covered by a P11D.
Why should employers be concerned?
Expenses have become even more of a hot topic over the last year or so. HMRC employer compliance officers take a dim view of mileage expenses fraud and see it as having scope for recovering sometimes substantial settlements, especially when company cars are involved and fuel scale charges may be imposed. Fleetmiles accurately captures business mileage by using GPS technology. Mileage round-up is eliminated and the system ensures that business and private mileage can be simply and accurately recorded in a way which can be used for mileage audit as it is HMRC compliant. For more information on how Fleetmiles can help your business avoid the headache of HMRC fines visit www.fleetinsight.co.uk.
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