Failure to keep accurate mileage records can have significant ramifications for fleets, including fines from HMRC and fraudulent driver claims. Here, five fleets tell Catherine Chetwynd how they manage the issue.
Paul Tate commodity manager, Siemens
Fleet size: 1,200 commercial vehicles, 3,300 cars
How do you capture private/business mileage?
We give drivers a fuel card and ask them to buy all fuel on that. The company’s technology works in conjunction with the fuel card.
We put in the opening and closing odometer readings each month and it calculates the total mileage. Drivers add in their business trips, postcode to postcode, plus a description of why they did the journey, and send that to their line manager to be authorised.
We have the business total and the total mileage driven and this is divided by the fuel spend to give X pence per mile.
We multiply that by the private mileage for the private mileage contribution to the bill.
Siemens pays back the business mileage at the exact pence per mile sanctioned by HMRC.
If drivers fail to declare what is business and private and this is verified by their line manager, they have the full amount on the fuel card deducted from their salary.
Occasionally drivers use grey fleet and are recompensed for business mileage by AFR or AMAP rates.
We have had fuel cards for around five years, since HMRC ceased to accept fuel vouchers.
What are the advantages of the current method?
The software is HMRC-compliant and gives postcode to postcode data that verifies the journey.
What are its disadvantages?
There is no disadvantage. After some initial polarity, employees embraced it.
Do you use the data for anything else?
We monitor the performance of the fleet, calculate the carbon footprint and see where replacement cycles are. We also check on health and safety and look at people who are potentially driving an excessive amount, and we work with them and their line manager to mitigate that.
What advice would you have for other fleet managers looking at this area?
Mileage capture is an important part of managing a fleet and knowing what the fleet is doing as part of a health and safety programme.
It also allows you to forecast vehicle usage and replacement cycles, and accurate data can be used to improve contractual terms to reflect mileage covered and the leasing company will support that.
Graham Short, fleet manager, Zip Water
Fleet size: 69 vans, 53 cars
How do you capture private/business mileage?
We capture mileage via a phone app and TomTom telematics in vehicles, where a button allows the driver to select business or private mileage before they set off.
At the end of each month, the driver can look at trip data on a phone app, confirm that everything is correct and submit it to the finance department.
The accounts people pay private mileage based on HMRC rates for each vehicle and what drivers owe is either offset against expenses or subtracted direct from salary. We have been doing that for about 18 months.
Before that, I wasn’t working for the company but I understand drivers detailed daily work trips on a spreadsheet. It was arduous and time-consuming.
What are the advantages of the current method?
It is robust, GPS-tracked and provides real-time data, so there is no risk of inaccurate reporting or rounding up, so that if we are audited, we have accurate records.
And it takes just minutes for the driver to check and submit.
What are its disadvantages?
I can’t see any disadvantages.
Do you use the data for anything else?
We use the tracking data to manage driver behaviour. In conjunction with our vehicle management software, we can keep an eye on fuel economy, driving efficiency and main-tenance planning.
What advice would you have for other fleet managers looking at this area?
Don’t do nothing.
David Oliver, procurement manager, Red Bull UK
Fleet size: 232 cars
How do you capture private/business mileage?
We have fuel cards for all vehicles and do mileage capture through software solution Vertivia for vehicles people can use privately.
The driver inputs business miles into a web portal and submits it at the end of the month. Once their manager has approved the submission, it goes to Vertivia, which also takes a feed from our fuel card provider.
Vertivia works out the employee’s liability for private mileage, which is recovered from their salary.
We brought in the system and the fuel card simultaneously around July 2012. Before that, people would buy fuel and claim via expenses, so drivers were having to fund the fuel upfront and retain copies of receipts and keep mileage records for the expenses claim.
It involved more administration, there was more of a tail in employees getting their money back and there was not much of a paper trail for us.
Analysis suggested there were more business miles than private being clocked up and we felt we should fund that and claim back the private bit, it was fairer to employees.
What are its advantages?
The system provides more of an audit trail for HMRC, it is less labour-intensive for drivers and provides a better paper trail for us. It is also easier to recover VAT, which is 20% of the pump price.
What are its disadvantages?
It is not automated.
Do you use the data for anything else?
We do mileage analysis and fuel economy of certain teams.
This also covers duty of care and we check that no one is doing extreme mileage.
What advice would you have for other fleet managers looking at this area?
If you have got people doing a mixture of business and private mileage and you want some means of measuring and capturing it – and of using the data – this is the way to go.
Nigel Boyle, administration and technical director, PD Hook (Hatcheries)
Fleet size: 100 cars, 90 vans, 200 HGVs
How do you capture private/business mileage?
All our car drivers receive fuel cards. We give them the option of fully-expensed fuel where we pay for private fuel and they pay extra tax; only three people across the country do that.
We ask the rest to keep a record of private miles and submit it as a negative charge on their expenses.
We send an email out to our database once a month. The drivers fill it in and send back to allow us to track the overall mileage.
We have done this since the database was created in the late 1990s.
What are the advantages of the current method?
It is nice and simple, and for the majority of people, it’s cheaper to opt out of the tax option on private mileage.
What are its disadvantages?
This system is fairly straightforward. The only way it could be improved is if we were able to utilise our electronic expense system.
Do you use the data for anything else?
We use it to maintain vehicles within the correct mileage so that we don’t get penalties at the end of contracts.
What advice would you have for other fleet managers looking at this area?
The most important thing is to find out the acceptability to staff of electronic versus paper expenses.
We have an electronic expense system on our HR payroll.
However, when we did a survey of everybody who does expenses I was surprised by the number of people that didn’t have access to a computer to do it, so we use paper.
Colin Hutt, category and contracts manager (fleet & insurance), CITB
Fleet size: 340 cars, 40 commercial vehicles
How do you capture private/business mileage?
When company car and grey fleet drivers make a business trip, they claim the amount of miles on their expense form and get paid a flat rate for that mileage.
They fund all the other mileage they do. We are only interested in private mileage in pool cars because they should have incidental private use.
We have log books for them and are trying to use a GPS tracking system, where drivers have to note every journey they make. We do that so that we have some control and people understand that.
We have been doing this for four or five years. Under the previous policy, we had a private use contribution, which we deducted from every company car driver at two levels: up to 12,000 private miles a year and more than that.
We also provided company car drivers with fuel cards, so they had free fuel and when we were doing that, we had to log each year the amount of business and private miles. We changed the policy because people didn’t keep an accurate record of their mileage.
What are the advantages of the current method?
It is simple.
What are its disadvantages?
We are assuming 20,000 is an appropriate mileage to contract vehicles but without doing analysis of odometer readings and subtracting business miles claims from payroll, there isn’t an easy way of calculating the private mileage.
Do you use the data for anything else?
To stay within contract with the lease provider.
What advice would you have for other fleet managers looking at this area?
If it involves a lot of work and administration, think about how useful it’s going to be to you.
Do you need it for the whole fleet or is it more important for certain vehicles?
There is an HMRC requirement to report on mileages of our shared vehicles but how useful if that going to be for company cars generally?
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