Manage the complexities of Grey Fleet business mileage with Fleetmiles
Tax relief for business mileage recording can be a minefield. Put in the simplest of terms, tax relief is allowed for travel if the employee is obliged to incur and pay any costs during the course of his or her employment, and the expenses are necessarily incurred on travelling in the performance of the duties of the employment. Application of the rules is sometimes not as straightforward as it seems. For instance, say an employee is a sales representative for The Midlands. If an employee lives outside the area in, say, Leeds, HMRC will deny tax relief for the travel or business mileage from the home in Leeds which is outside the area covered, until the employee reaches the boundary of his or her area, in this case The Midlands. Fleetmiles uses geo-fencing to help you manage this. The system accurately facilitates business mileage capture by using GPS technology. Points of interest, commonly known as POI’s, can be entered on each driver record at set-up stage. These measures not only eliminate mileage round-up but also ensure that business and private mileage can be simply and accurately recorded in a way which is HMRC compliant.
Helping to meet Duty of Care obligations Fleetmiles also has automatic alerts to ensure an employers’ Duty of Care requirements are met. The system checks driver licenses, MOT, insurance and maintenance records to ensure that drivers are conforming to Health and Safety compliance. The data gathered by Fleetmiles can also be aggregated to help employers achieve improvement targets and provide accurate mileage audit trails for HMRC.
Business mileage reimbursement
In a similar way, mileage reimbursement also has its headaches for employers, particularly those managing Grey Fleet mileage expenses. The tax treatment of business mileage reimbursement is dependent on whose car is being used for the business journey. The rate of reimbursement to company car or van drivers has to be substantially less than the amount reimbursed to an employee using their own car or van on the employers business because the employee has to meet more than the cost of the fuel used on the journey. The rate reimbursed has to reflect the cost of running the car including road fund licence, insurance, servicing and depreciation of the vehicle. Directors and employees using their own vehicles on company business can be reimbursed up to the authorised mileage rates which are statutory amounts without incurring any Income Tax or Class 1 National Insurance Contributions liability and importantly with no reporting requirement for the amounts reimbursed up to those rates. Fleetmiles helps employers to manage their Grey Fleet mileage expenses by allowing you to set mileage caps and input allowance information depending on the type of vehicle being used by an employee or sub-contractor. For more information on how the Fleetmiles system can help your business manage the complexities of business mileage and Grey Fleet mileage expenses, visit www.fleetinsight.co.uk .
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