HMRC relaunches checks to target poor mileage records
21 November 2012
Author: Jack Carfrae
HMRC is re-launching its business record checks to keep a closer eye on company tax records, which could lead to more thorough inspections of mileage reports.
Businesses suspected of keeping inadequate tax records will receive letters advising them that HMRC will phone them to discuss their book-keeping.
The call will comprise a series of questions to discuss each company's practices, which may lead to what HMRC describes as "tailored educational support" or a business records check visit, should it deem a firm's records to be insufficient.
Subsequent penalty charges may apply if it finds that businesses have made no efforts to improve their records later on.
Paul Jackson, managing director of mileage audit and fuel expense management specialist TMC, commented: "While this particular programme is aimed at small businesses, company car operators remain under close scrutiny from the Revenue because mileage is a known area of weakness.
"The issue at stake is whether firms check their drivers' mileage claims adequately. Overpaying is tantamount to providing private fuel and carries a big liability for tax and National Insurance.
"Company records need to show sufficient detail about business journeys. That means recording the date and purpose of every trip, the start and finish points and accurate mileage.
"HMRC will also look for evidence of regular checks on the accuracy of claimed mileages to prevent overpayments."
HMRC will begin the checks on 26 November, starting in London and Anglia. Checks for each region will last for two weeks and will end with South Wales and the South West of England in February.
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