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Take care with your mileage records, get properly advised, and you should have nothing to worry about

WE have seen over recent months a growing number of articles suggesting that HMRC is attacking the business mileage records of employees who have claimed mileage allowances for the use of their own vehicle on business travel. 

These include this article in Business Car Manager.

Whilst it is important that an employer does have controls in place to ensure that mileage claims do look reasonable it is not the case that this is an area of particular interest to HMRC.

HMRC publishes the particular areas which they are targeting and mileage capture does not feature. Also in the scope published by HMRC for employer compliance reviews of SME businesses there is no suggestion that mileage records are specifically targeted 

It is clearly the case though that in any employer compliance review by HMRC it is likely that a sample of business mileage records may be reviewed.

However in my experience, having been involved in this work both when an HM inspector and over 20 years in the profession,  whilst these reviews may leave the employer believing it is exposed to what appears to be a significant liability, if that employer is properly represented and the appropriate work is undertaken then hopefully any claim will be reduced.

It should be borne in mind that a similar claim arises not just on employees using their own vehicles on business but company car drivers who receive a mileage reimbursement, or Authorised Fuel Rate payment (AFR) (for the latest rates click here). 

Alastair_Kendrick
Alastair Kendrick is a former tax inspector and is now tax director at MHA MacIntyre Hudson

What is important is that those experiencing difficulty consult qualified tax advisers and work with them to address the concerns of HMRC and introduce controls.

I have also seen a number of suggestions that particular mileage software is HMRC approved.

This is unlikely to be the case and employers need to take care to look carefully at what HMRC has/has not said.

It is not the policy of HMRC generally to approve systems other than payrolls – it is more  likely that HMRC has approved the use of the software by one particular employer and that approval may have been given due to the controls that employer had in place around the review and checking of the data the system generated.

This does not of course mean that this system is HMRC approved.

It is therefore important not to assume that HMRC is comfortable with the systems and those looking to purchase systems need to exercise care and look for help from a qualified tax adviser.

Alastair Kendrick is tax director at MHA MacIntyre Hudson.

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