Fleet News

56% of company car drivers unaware of HMRC business mileage rules

Car clocking, Cap HPI.

More than half (56%) of company car drivers are unaware of HM Revenue and Customs (HMRC) rules on reclaiming business mileage, according to a YouGov survey.

Businesses whose employees use a company car have a duty to report it to HMRC, particularly if the vehicle is used for personal trips like driving to and from work.

Companies have to keep mileage records to show how their vehicles are being used. If the company doesn’t provide free fuel for private use to company car drivers its records must prove it.This requires drivers to record ‘to’ and ‘from’ locations, the reason for the journey and the number of miles travelled

The survey, which was commissioned by ABAX, found that 36% of employees update their mileage log less than once a fortnight, leaving companies potentially exposed to inaccuracies.

Frank Ystenes, ABAX UK managing director, said: “It is crucial business owners and employees understand the laws and ensure accurate records are kept otherwise the penalties can be high.”

Cambridgeshire-based engineering company Ivor Searle received a spot check visit from HMRC in early 2015. On inspection, it was found employee mileage claims were being estimated and could not be reconciled to fuel card invoices.

The company now faces a potential fine for an incorrectly compiled business/private mileage log and the driver facing a full fuel benefit charge for just a small number of unaccounted for miles.

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. We 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.”

One of ABAX’s products now used by Ivor Searle drivers is an electronic Triplog which automatically documents all driving via GPS, calculates mileage and distance, keeping businesses in line with HMRC regulations.

Login to comment


  • AJB - 24/04/2015 12:53

    Mmmm 56%- really ?

  • Sage & Onion - 24/04/2015 13:31

    There are so many GPS tracking devices on the market now, together with mileage tracking Apps (again presumably using GPS), all with the ability to report journeys for the driver to identify as private or business mileage. But does the HMRC accept GPS mileage as accurate for their purposes? In some cases there can be a variance in as much as 10% between GPS mileage and actual speedo mileage on the car (with GPS recorded mileage being less than actual speedo mileage) but the average variance tends to be about 3%. Perhaps someone from HMRC could answer this question before fleets invest in technology that may prove to not meet HMRC requirements.

    • Chris - 01/05/2015 11:54

      For anybody missing Top Gear, this is a James May style answer... Some will fall asleep, but stay with me if you can! GPS is a very accurate method of recording distances for the simple fact that it is calibrated. The reason for variance - and we have all seen this when using a sat nav - is that the speedometer on the car is not calibrated continuously. As tyres wear down, their circumference decreases. However the sensor that measures wheel rotation, thus distance, reads from a fixed point, not the tyre. Therefore a worn tyre will have a circumference of say 10% less than a new tyre. But as far as the electronics in your car are concerned, each revolution of a tyre results in the same distance travelled as when the car was brand new. This is because the position of the sensor that reads wheel rotation does not change. A good way to see this in practice is to look at the difference in speed between a sat nav and speedo before and after new tyres have been fitted. Drivers generally see a drop in recorded fuel efficiency after new tyres are fitted for the same reason. Prior to the new tyres, the car thinks that it is travelling further per gallon of fuel than it actually is!

  • BPM - 28/04/2015 22:35

    56% people think they will get away with it, until the figures don't add up, then plead ignorance.

Compare costs of your company cars

Looking to acquire new vehicles? Check how much they'll cost to run with our Car Running Cost calculator.

What is your BIK car tax liability?

The Fleet News car tax calculator lets you work out tax costs for both employer and employee