The article written in a recent edition of Fleet News highlights just how much HMRC are clamping down on companies who fail to keep adequate mileage records.
Tax inspectors are uncovering poor mileage record-keeping in a number of areas. They include employees overestimating business mileage by an average of 25% with their employer having no auditable evidence – postcode to postcode or to and from an actual address – of a journey taking place, and ‘positive rounding’ with employees inflating business mileage so recorded trips usually end in ‘0’ or a ‘5’.
These are some recent fines handed out by HMRC
• A south of England-based pharmaceutical company initially fined £10 million for mileage record discrepancies associated with around 1,000 drivers. The company appealed and eventually agreed a settlement of about £1 million.
• A company fined £500,000 after an HMRC inspection of mileage claims relating to 20 company cars was extrapolated across the organisation’s 300-strong fleet.
• An SME with 15 drivers fined £25,000 after an HMRC audit revealed an employee - one of three whose mileage reimbursement claims were closely scrutinised - had significantly overstated their business mileage. The business paid tax liabilities and penalties in relation to one third of all mileage claims, going back four years.
• A construction company in the West Midlands fined £128,000 for discrepancies in relation to 10 vehicles.
• A transport company fined £42,000 for irregularities relating to 10 vehicles.
• A business fined more than £28,000 in relation to mileage errors associated with two company cars.
• A company fined £21,875 also relating to inadequate mileage reporting relating to two company cars.
Don't get caught out through poor record keeping. Find out how to write a mileage log and even download an ABAX template.
Better still, speak to an ABAX expert today on 01733 69 88 88