HMRC Likely to Target Employee Mileage Claims and Expenses

A recent survey of 1,200 company car drivers found that more than 1,000 admitted to having falsified their mileage claims. 89 per cent had submitted inaccurate claims and 63 per cent had added 'non-business' mileage to their claim. In addition, more than a third of company car drivers admitted 'making up' their claims.

HM Revenue and Customs (HMRC) are very unlikely indeed to be unaware of this, and mileage claims are already a favourite review area in PAYE inspections as it is a 'soft area' for gleaning extra tax revenue.

If you have a PAYE inspection and there are serious shortcomings in the system by which you control the reimbursement of mileage and/or other expenses incurred by employees, the cost in additional tax and penalties can be considerable and the loss of an HMRC 'dispensation' from keeping even more detailed records can create considerable extra administration costs.

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