Business Mileage Claims made easy
Original post http://www.ion.icaew.com/itcounts/25902 08.12.2012 17:38 by Kevin Salter
How do your employees (in any business of any type) deal with their business mileage claims? Do they record them religiously every day, accurately, and maintain a detailed log of business and private miles, or do they perhaps say they do this, but the reality is that it done once a month, in a hurry, shortly before the deadline for submission for payment that month? (You may not know the answer!). You may also not know whether the mileage is recorded or whether it is a calculation based on inputting the journey into Google Maps or similar (is the shortest route mileage used..?)
Perhaps it is a little more sophisticated, and a spreadsheet is maintained, perhaps on a mobile phone or tablet device. This at least adds up the figures and does the calculations of miles multiplied by the rate paid per mile.
How accurate is the mileage claimed? There may be a good reason why it is 10 miles further than you expected – perhaps a diversion following an accident, or road works. How often do you actually “challenge” mileage?
This is an area in which HMRC have an interest, especially on PAYE inspections, and it may also feature in the Business Records Checks which have reappeared on the radar.
There is, however, some innovative software available, which makes the preparation of expense claims so much easier, and reliable from both the employer and employee viewpoint.
In a nutshell, a “dongle” similar in size to a USB pen drive, is inserted into a USB socket or 12v cigarette lighter in the car (with other options in development). This dongle has a built in GPS (global positioning system). This device starts up when the car starts moving, and stops once the car has been stopped for 20 minutes (in the version I was testing). Future versions will have user defined settings. The reason for this delay….some cars has stop-start technology, and there will be other fairly regular short stops e.g. the garage to refuel.
Just plug it in and forget it. When the time comes to do the mileage claim, the device is plugged into the PC and the desktop software launched. This downloads all of the data from the device and uploads it to the web site. A detailed list of every recorded trip is then available on screen. The trip shows the start point address (accurate to within a few feet-it shows my house as number 12, it is actually 25)(note once you select your home address it will use this every time it is within 150 metres), the end point address, and the number of miles to two decimal places. The journeys then need to be “tagged” as business or private, with the option to tag them all as either of these in the first instance and then untag those that are not correctly classified. There is then an option to enter who you went to see and the purpose of the visit. This calculates the business miles at the mileage rates selected and the detailed claim is complete.
There are other
more complex options allowing the use of the same dongle in different cars etc.
From the employer’s viewpoint, just 10-12 miles a month wrongly claimed in the past by employees and now accurate will have this device pay for itself. From the employee viewpoint, the expense claim is no longer the tiresome task it once was.
Further information is available at http://bit.ly/VZJDQO
Have you had any experiences of settlements with HMRC for incorrect mileage claims, which a product such as this would have helped to avoid?