Easy Target
Mileage claims are seen as an easy target by the Revenue’s investigators because virtually all companies pay drivers miles and the tax rules require businesses to keep records to substantiate what they pay to drivers. Firms are facing six-figure back-tax bills and fines for payments on ‘phantom’ business miles in a wave of investigations into these fuel and mileage payments.
HMRC has declared open season on insufficiently checked mileage claims, with evidence of tax inspectors going to extraordinary lengths to uncover false or missing reports.
For example, a tax investigator spent days using an online route planner to scrutinise claims made by 20 drivers, as he went through one company’s mileage records.
The checks, which went back several years, allegedly revealed inaccuracies that usually resulted in the drivers being paid too much.
HMRC told the firm it would treat claims by the firm’s 135 other drivers as similarly inaccurate. It has warned the business that it faces a potential total charge of £400,000 in respect of tax-free payments it made for these alleged ‘phantom’ business miles. This is not an isolated case.
Un-audited
If HMRC finds errors in the records, such as drivers claiming tax-free mileage payments for more miles than they actually drove, they can go after a company for the tax due on the difference – plus interest and penalties.
Mileage Capture System
One company could not produce mileage records relating to all its past payments to drivers.
HMRC took the view that this meant that the firm had effectively paid for some private fuel and therefore the drivers owed private fuel benefit tax going back six years.
The company eventually paid the drivers’ tax liabilities as part of a total settlement of over £350,000.
Duty of care...
Each and every company has a legal obligation and duty of care to their company car drivers, and this extends to anyone driving on company business. Our data can form a valuable part of your duty of care records ensuring the company is monitoring its drivers.
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In-acurate claims costing your business? No time to claim your mileage?
Mileage Capture System
www.autoexpenses.co.uk
Mileage Capture System
www.autoexpenses.co.uk