Business mileage investigated by HMRC

Businesses that typically cover their vehicles with commercial vehicle insurance are being warned to ensure their company records are up to scratch as a Government department prepares to put them under scrutiny.

Inspectors from Her Majesty’s Revenue and Customs (HMRC) will be putting businesses that pay employees business mileage under the microscope. It has been historically an area where companies fall foul of the tax system, and a overhaul of HMRC’s business records checks programme has supposedly changed their focus to cajoling companies to adopt a correct way of keeping their records rather than punishing them for getting it wrong.

Despite the softly softly approach by HMRC lots of companies will still worry about any close scrutiny of business mileage records and Paul Jackson, managing director of the Miles Consultancy, said “The issue at stake is whether firms check their drivers’ mileage claims adequately. Overpaying is tantamount to providing private fuel and carries a big liability for tax and National Insurance. Company records need to show sufficient detail about business journeys. That means recording the date and purpose of every trip, the start and finish points and accurate mileage. HMRC will also look for evidence of regular checks on the accuracy of claimed mileages to prevent overpayments.”

It is just another part of the complicated business of keeping a fleet of vehicles on the road, but one can forgive fleet managers for thinking it is a part of their job they could well do without. At least Richard Summersgill of HMRC’s Local Compliance Unit did offer them crumbs of comfort by saying: “We’ve listened to businesses and agents, and revamped our business records checks programme to make it more streamlined, targeted and better focused on education.”

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