Mileage Expenses and Tax
- HMRC wants to ensure that all companies and individuals in the UK pay the correct and appropriate amount of Taxes.
- Mileage is generally paid to an employee free of tax or national insurance.
- If a driver has over-estimated business mileage, then payments have been made without tax that should have incurred tax.
- HMRC wants to ensure that mileage has not been paid for miles that have not been driven.
- To do this HMRC may want to audit mileage records to check that all is in order.
- HMRC will expect to see detailed records of all mileage expenses to enable them to undertake a full audit.
- If the mileage expenses, process, policy and data capture is not comprehensive enough then it can be deemed to be non-compliant.
- There are significant penalties not only for the overestimation of business mileage but also for non-compliance of mileage records.
- You must submit accurate and compliant mileage expenses or you risk significant financial penalties
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