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Business Mileage and Mileage Capture, Considering the Options

Alex Baker from FLEET INNOVATIONS™ looks at the issues – and the consequences – surrounding accurate business mileage capture

In today’s modern fleets there are very few genuine opportunities to significantly reduce everyday cost without major disruption and change to drivers.

As such, business mileage expenses are one area that a growing number of fleet professionals are beginning to recognise as a real opportunity to deliver substantial savings without introducing material change to their fleet policy.

There are many compelling arguments for a robust and compliant business mileage reporting system. The amount of over-estimation in this area is believed to be as high as 25%, this being the case it would follow that carbon emission levels are also exaggerated by the same amount so the introduction of a reliable and accurate monitoring system would reduce both cost and emissions.

Another area of associated cost is the growing number of investigations and fines levied by HMRC. In a recent HMRC paper, an intention to recover £120m in lost revenue was stated; and in the three years from 2012, 60,000 SMEs are to be investigated. The paper highlights a staggering figure of 40% of businesses believed to have inadequate records and some 11% that were worthy of further investigation and potential fines.

With fines of up to £3000 per driver/per year and the ability to backdate unpaid tax for six years, the sums involved are not unsubstantial.

The issue very much revolves around the ability of an organisation to produce records that are auditable and show that care has been taken in order to provide as accurate a record as possible. Over-payment of mileage re-imbursement is effectively tax-free income and fleet operators must show that reasonable measures have been undertaken in order to avoid this happening.

So what tools and solutions are available to assist an organisation in the quest for compliance and the never-ending drive to reduce costs?

Traditional mileage capture

A number of providers offer traditional mileage capture systems, where drivers log into a system with an application such as Google Maps open next to them and supply mileage details for each trip. An audit facility is sometimes available whereby the provider checks that journeys are accurate when compared to Online postcode-to-postcode measurement facilities and route planners.

Whilst this service ticks a box in terms of providing an auditable mileage record it does little to reduce over-estimation or ‘phantom’ trips. It must also be recognised that postcode-to-postcode measurement systems are only accurate if the suggested route is the one actually taken, often local knowledge of an area or regular journeys will result in a more direct and shorter route being chosen.

In terms of cost this level of mileage capture provision is inexpensive until the inclusion of the audit facility is factored in.

A traditional mileage capture system would work well for drivers claiming infrequently and for small amounts where there is less scope for over-estimation and fraudulent claims


At the other end of the scale, telematics can provide accurate mileage data along with a host of other benefits such as vehicle tracking, driver characteristics such as heavy braking and heavy acceleration as well as details of speed undertaken.

However, this level of technology comes at a cost (installation, de-installation and a monthly fee) and the technology stays with the vehicle so replacement and hire vehicles cannot be monitored.

Perhaps the main reason why organisations tend not to opt for telematics is because of the ‘Big Brother’ issues that arise as a result of ‘the little black box’ in the vehicle. Whilst a limited number of organisations are prepared to be prescriptive around this issue with company cars, it is very unlikely that an individual would ever agree to one being installed in his or her privately-owned (and thus grey fleet) vehicle.

In the right situation telematics is very clearly a fantastic solution. For large delivery van fleets telematics is a perfect fit, in addition to mileage details options for vehicle tracking, it can be a very powerful control and monitoring tool.

GPS mileage dongle

The GPS dongle has been described as sitting somewhere between traditional mileage capture and telematics in terms of both cost and functionality.

The system uses a small GPS device that is powered by either a USB port or a 12v cigarette lighter as found it most vehicles. Rather than having an on-board mobile SIM card, the user uploads the trips via a computer or smart-phone on a monthly basis.

The PEAK system is simple and quick to use and designed to eliminate over-estimation and the inclusion of phantom trips.

Because a user can hide personal trips, it is not perceived as ‘Big Brother’ so is also ideal for grey fleet drivers. Additionally, because the dongle follows the driver, and can be used in any type of vehicle, it is ideal for drivers who have the opportunity to drive more than one vehicle.

This type of technology is designed for drivers who have to cover multiple journeys or may be classed as relatively high mileage.

The GPS dongle systems are ideal for businesses that have concerns over the accuracy of mileage data to ensure compliance with HMRC guidelines and reduce overestimation and fraud. They are ideal where the benefits of GPS data are desirable but where telematics is seen as overkill or cost factors determine it to be unrealistic.

At a Glance Guide

Traditional mileage capture
GPS Mileage Dongle
Depends on driver YES YES
HMRC compliant
Depends on driver Depends on system YES
Big brother issues
Tracker option
Will it reduce cost?
NO Dependent on system YES
Implementation cost

Whatever the option you may consider business, mileage claims offer genuine cost reduction opportunities for many organisations.

Consider your current method of recording and reimbursement for business mileage. Is it accurate? Would it stand up to HMRC scrutiny? Could it be done better?

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About the Author

Alex Baker
"The reasonable man adapts himself to the conditions that surround him... The unreasonable man adapts surrounding conditions to himself... All progress depends on the unreasonable man."

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