Nine out of 10 companies would risk penalties if a tax inspection looked at their business mileage records, estimates TMC.
The mileage audit company says that more than half of drivers regularly over-claim on fuel and mileage expenses. This makes them liable to pay benefit-in-kind (BIK) tax because their employer effectively pays for some of their private mileage.
HMRC is focusing on mileage records during tax inspections, says TMC managing director Paul Jackson. A number of firms have consequently been hit by six or even seven-figure claims for fines and back tax. The cases follow detailed HMRC investigations into fuel expense payments and mileage logs.
It discovered, 93% of the companies that it looked at rely on unaudited mileage reports and are therefore at risk of being caught by a tax investigation and around 60% of drivers claim for more business fuel than they actually use.
“We know from experience that HMRC is going to extraordinary lengths to find evidence of this in mileage records,” said Jackson.
“Unaudited mileage puts fleets in double jeopardy. They overpay for business journeys and risk tax penalties going back six years.”
TMC’s proactively audited mileage capture system is now used by companies employing over 100,000 business drivers. Most of the current customers are large enterprises but TMC today launches a version of its system tailored specifically for small and medium sized businesses.
Called TMC2, it delivers 'Mileage Audit in a box' to organisations with from one to 100 drivers.