How Tracking Can Protect You From a Huge Tax Bill On Your Company Cars

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A recent article in FleetNews reports how a company was recently hit with a near six figure tax settlement despite monitoring mileages for it’s car fleet.

“We thought our system was okay,” the company’s fleet manager says. “I had a spreadsheet with private and business mileage separated on it and I had built up a picture for every employee. I knew which drivers did low private mileage because they had a second car.

“I looked at fuel purchase trends and I checked the mpgs to see if they looked right for the car, although that isn’t foolproof.

“I also emailed drivers regularly to remind them to submit their mileages at every purchase with their fuel card.”

Unfortunately, these measures were not enough to satisfy a tax inspector.

The visit found that the company’s mileage logs did not leave a clear audit trail to determine that all of the private fuel had been repaid to the employer.

Of a sample of 28 drivers, only 10 were considered sufficient.


The reasons HMRC gave were “poor annotation”, odometer readings were not declared when purchasing fuel at every purchase, the odometer readings were found to be different to what was shown on the fuel card statements and mileages were rounded.

A driver who said he never used the car for private use was filling up his company car on a Sunday, which counts as a private journey.

This left the company facing a six-figure tax liability but, like most companies, it decided not to seek settlement from the employees.

“They had followed the expense system,” the fleet manager says. “It was our expense system so we have to take some portion of the blame.”

How We Can Help To Protect You

Our vehicle tracking software tracks your vehicle mileages automatically and provides simple, unequivocal reports for your whole fleet.

We can also alert you if a vehicle is used out of working hours when it shouldn’t be to ensure that you can stop this problem before it costs you.

Our system can also help differentiate private & business mileage through use of a Dallas key reader. To help protect privacy in private journey mode, the location information is blocked.

It May Not Be Too Late

If you are hit with a similar tax issue, it may not be to late! HMRC will often reduce your bill if you show willing to manage the issue going forward and understand how tracking will do this for you.

If you want to ensure full protection from this or any other legislation, please call us today