HMRC cracks down on phantom business miles
07 March 2011
HMRC has launched a crackdown on firms claiming "phantom" business miles from fleet cars used privately, according to business mileage audit company, The Miles Consultancy.
It claimed HMRC saw mileage reporting irregularities as a major source of unpaid business taxes. TMC said an average of one in four tax claims by UK employees was fraudulent but added that it was easy for local tax inspectors to check up on businesses' tax records, which could land companies with huge fines as well as having to pay backdated bills.
TMC boss Paul Jackson said: "It's open season on unaudited mileage. We have evidence of inspectors going to extraordinary lengths to uncover false or missing reports."
TMC said that five businesses currently under investigation for mileage claims could face total fines and back payments of £2m.
Jackson added: "Businesses need to realise that mileage recording by itself is only half the battle. Unless you also audit your data you're simply ensuring your business is an obvious target as far as HMRC is concerned."
Jackson warned that whatever companies unwittingly paid for falsely claimed business miles would double if the tax office stepped in to audit the accounts.
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