Guess your mileage and risk being fined by the tax man, companies are warned

HMRC

HMRC - Credit: Archant

Companies are being warned to make sure staff log their mileage correctly in the light of a Cambridgeshire business that faces a potential fine after it was discovered staff there were guessing journey distances.

The tax man is getting tough on companies which fail to report mileage claims accurately and are spot checking which is when Soham-based engineering firm Ivor Searle was found to have estimated employee mileage that could not be tallied up to fuel card invoices.

The company could be fined heavily as a result – including a potential penalty fine for incorrectly compiled paperwork.

“This comes at a time when we’ve recently published some YouGov survey results which show that 70% of business owners don’t fully understand the tax implications that surround mileage claims in their fleet,” said a spokesman for ABAX, which help companies comply with HMRC regulations.

“There are massive implications for businesses across Cambridgeshire which could face a similar fate if they fail to understand the tax regime correctly.”


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Ivor Searle received a spot check visit from HMRC in early 2015. A visit normally happens every five to 10 years.

At the time, driver mileage claims were compiled manually in a spreadsheet. The inspector found discrepancies in the logs of an account manager and deemed that all employees were estimating mileages.

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David Eszenyi, operations director for Ivor Searle, said: “It is something you don’t necessarily think about on a day-to-day basis when you are concentrating on the bigger picture of running a company.

“Our employees were manually logging their mileage in to a spreadsheet each month. The HMRC inspector noticed a small number of discrepancies in one of the mileage logs and alerted us to them.

“We employ around 110 people and as a medium sized business we don’t have someone specifically looking after our vehicle fleets, it is a combined effort. W”e now realise our understanding of the tax regime wasn’t as it should be and are taking steps to make sure it is in the future.”

ABAX supports businesses and individuals who use a vehicle for work by helping them to remain compliant with HMRC regulations.

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