In our series on the latest travel and subsistence rules from the Office of Tax Simplification, Kate O’ Regan examines the various mileage scenarios.
Business mileage is the travel that an individual is necessarily obliged to do in the performance of his or her duties. A typical example might be where an employee has to travel directly from their ‘normal workplace’ to a client, supplier or professional advisor.
How can we satisfy HMRC that drivers only claim for business miles? Business mileage does not include:
• Travel from home to a normal place of work (ordinary commuting)
• Private travel – non work-related journeys
• Travel from home to a location near your normal place of work (as a guide, within 10 miles of your base).
It makes no difference if the journey takes place outside normal working hours. This may include, for example, attending an alarm call in the middle of the night.
HMRC asks: “Which journeys are ‘work journeys’?
The 10 mile rule
Scenario two – Journeys that start from home
If your journey starts from home, the mileage can be claimed as long as the temporary place of work to which you are travelling, is not within a 10 mile radius of your permanent place of work.
Journey A: As the temporary place you are visiting is more than 10 miles away from your permanent place of work, your travel to/from the temporary place of work is allowed in full.
Journey B: If you then travel to your permanent place of work after your meeting etc at the temporary place this travel is also allowed in full.
Journey C: If you then travel home from your permanent place of work, this journey represents your normal commute and is not allowed for tax and NIC purposes.
Multiple trips If after completing your first meeting you then travel to another meeting then travel between meetings will be business related and allowable for tax and NIC purposes even if the second or any subsequent meeting place is within the 10 mile radius.
If you travel from home to a temporary workplace which is within ten miles of your permanent place of work, then HMRC will not consider the journey to represent a genuine business journey, on the basis that it is similar to your normal commute.
Scenario Three – Journeys that finish at home
If your journey finishes at home, the mileage can be claimed, as long as the temporary place of work you drive home from was not within a 10 mile radius of your normal place of work. If your temporary place of work you drive home from is within 10 miles of your normal place of work then this can never be claimed as a business journey.
If you travel from home, to a temporary workplace which is within ten miles of your permanent place of work, then HMRC will not consider the journey to represent a genuine business journey, on the basis that it is similar to your normal commute.
Journey A As the temporary place you visited was more than 10 miles away from your permanent place of work, your travel home from the temporary place of work is allowed in full.
Journey B If you travelled from your permanent place of work to temporary place this travel is also allowed in.
Using GPS technology
One option is the use of innovative GPS technology, which aids the maintenance of accurate records in a fraction of the time taken to complete ‘traditional’ paper based or online records. Also, the driver is in control of the data and so ‘Big Brother’ issues associated with off the shelf telematics solutions is also managed.
The driver simply hides the detail associated with the private trips but still retains a full audit trail of the business trips to support their claim (see below). Finally the system holds details of the trip reason and ‘friendly’ names etc. making it easier and easier to use.
By Katie O’ Regan, sales consultant at Fleet Innovations.
In our series on the latest travel and subsistence rules from the Office of Tax Simplification, Kate O’ Regan examines the various mileage scenarios.
Business mileage is the travel that an individual is necessarily obliged to do in the performance of his or her duties. A typical example might be where an employee has to travel directly from their ‘normal workplace’ to a client, supplier or professional advisor.
How can we satisfy HMRC that drivers only claim for business miles? Business mileage does not include:
• Travel from home to a normal place of work (ordinary commuting)
• Private travel – non work-related journeys
• Travel from home to a location near your normal place of work (as a guide, within 10 miles of your base).
It makes no difference if the journey takes place outside normal working hours. This may include, for example, attending an alarm call in the middle of the night.
HMRC asks: “Which journeys are ‘work journeys’?
The 10 mile rule
Scenario two – Journeys that start from home
If your journey starts from home, the mileage can be claimed as long as the temporary place of work to which you are travelling, is not within a 10 mile radius of your permanent place of work.
Journey A: As the temporary place you are visiting is more than 10 miles away from your permanent place of work, your travel to/from the temporary place of work is allowed in full.
Journey B: If you then travel to your permanent place of work after your meeting etc at the temporary place this travel is also allowed in full.
Journey C: If you then travel home from your permanent place of work, this journey represents your normal commute and is not allowed for tax and NIC purposes.
Multiple trips If after completing your first meeting you then travel to another meeting then travel between meetings will be business related and allowable for tax and NIC purposes even if the second or any subsequent meeting place is within the 10 mile radius.
If you travel from home to a temporary workplace which is within ten miles of your permanent place of work, then HMRC will not consider the journey to represent a genuine business journey, on the basis that it is similar to your normal commute.
Scenario Three – Journeys that finish at home
If your journey finishes at home, the mileage can be claimed, as long as the temporary place of work you drive home from was not within a 10 mile radius of your normal place of work. If your temporary place of work you drive home from is within 10 miles of your normal place of work then this can never be claimed as a business journey.
If you travel from home, to a temporary workplace which is within ten miles of your permanent place of work, then HMRC will not consider the journey to represent a genuine business journey, on the basis that it is similar to your normal commute.
Journey A As the temporary place you visited was more than 10 miles away from your permanent place of work, your travel home from the temporary place of work is allowed in full.
Journey B If you travelled from your permanent place of work to temporary place this travel is also allowed in.
Using GPS technology
One option is the use of innovative GPS technology, which aids the maintenance of accurate records in a fraction of the time taken to complete ‘traditional’ paper based or online records. Also, the driver is in control of the data and so ‘Big Brother’ issues associated with off the shelf telematics solutions is also managed.
The driver simply hides the detail associated with the private trips but still retains a full audit trail of the business trips to support their claim (see below). Finally the system holds details of the trip reason and ‘friendly’ names etc. making it easier and easier to use.
By Katie O’ Regan, sales consultant at Fleet Innovations.
