TAX: HMRC looking to raise £7billion
Thousands of UK fleet drivers are unwittingly exposing themselves to £3,000-a-year fines as HMRC continue their clampdown on unauthorised vehicle use, RAM Tracking have warned.
The leading GPS tracking provider have highlighted the threat following reports the government have tasked HMRC with raising an additional £7billion a year in tax revenue.
Reports also suggest HMRC have recruited an additional 2,500 compliance officers to enquire into taxpayers’ affairs, including business mileage payments.
An HMRC pilot study in 2011 found 40% of small firms did not keep adequate business records, with one of the weakest areas being business mileage.
As such, an estimated 20,000 Business Record Checks (BRCs) will be carried out this year on small and medium sized businesses (SMB), increasing to 60,000 by 2015.
Overpayment of business mileage, even unwittingly, is equivalent to providing employees with a private fuel allowance and carries weighty liabilities for tax and national insurance payments.
In addition to the associated business disruption, companies can face fines of up to £3,000 per driver, backdated for up to six years if claims are inaccurate.
This leaves businesses with a fleet of 50 vehicles exposed to a potential £900,000 claim.
HMRC demand total accuracy on mileage payments and expect to see evidential recording of all journey details, including reasons and postcodes for mileage calculations.
Many businesses already have access to this information through their tracking software but are unaware how to access it, or that some providers can guarantee instant access to journey data for three years.
Chris McClellan, Director and Co-Founder of RAM Tracking, said: “Any company operating a fleet of vehicles will be aware of the obvious cost implications in unauthorised vehicle usage through fuel costs and falsified overtime claims, but many forget this can also result in significant tax liabilities.
“It’s not simply a question of employee/employer trust; it’s also being able to provide accurate, detailed mileage records to HMRC when requested.
“And this can be at any time.
“Implementing a vehicle tracking system such as RAM’s not only ensures all mileage is recorded, it also provides the business with an online management dashboard where reports can be collated and downloaded within seconds.
“A quick and easy way to save your business money, increase driver safety and ensure you and your drivers are tax compliant.”