What do you make of this mileage claim?

What do you make of this mileage claim?

Didn't find your answer?

Ideally I like to see business mileage claims set out, sometimes even neatly, showing date, destination, visiting whom, number of miles, the rate of claim and the amount claimed.

I have a limited company client. The director has made a claim stating for the period 'all mileage is business' and providing me with the starting and closing odometer readings.

As an agent for HMRC (oops, I mean the client) I am uncomfortable with this. Would it be acceptable to you?

Replies (14)

Please login or register to join the discussion.

Stepurhan
By stepurhan
01st Dec 2014 12:37

Possible?

The question you need to ask is, is it actually possible?

Do they have another vehicle they can use privately? Does the total mileage seem reasonable for the business? Basically, do you have any reason to disbelieve the client's assertion beyond gut feeling? If not then, as their agent, it would be wrong to exclude an apparently legitimate expense. You know the position if you don't think their claim stacks up. 

But I would make clear, in writing, that HMRC are likely to take a different view if enquired. Point out that, without any sort of breakdown, it will be hard to defend an assertion by HMRC that the total includes some private mileage. Possibly hint at the fact that a lack of support in this area might cause HMRC to think they are on to a winner with any enquiry so all their records could get subject to special scrutiny. They may stick to the assertion for this year, but would hopefully be convinced to do better in future if this is legitimate.

Thanks (2)
By thatsnumberwang
01st Dec 2014 12:41

Letter of Representation

It's not entirely beyond the realms of possibility, but I would want to provide evidence that I had challenged what the client had said. I would then make a detailed statement in a Letter of Representation and get the client to sign it before filing any accounts.

 

Thanks (1)
avatar
By andrew.hyde
01st Dec 2014 12:42

Old trick

Does he live over the shop? Or have a separate place of work?  If you happen to go and see him one morning, and the vehicle is parked there, feel the bonnet. If it's warm, ask where it's been that morning.

The other obvious question is whether he has another, 'exclusively private' vehicle.

And lastly, if it's true that all mileage on the vehcile is business, would it be more efficient to have the company own the car and prohibit any private use?

You clearly are not an agent for HMRC, but you nevertheless act effectively as intermediary and ensure fair play on both sides.  Besides that, you perform a significant service to the client by askling the questions HMRC will ask, but before they get the chance.

Thanks (0)
Replying to Glennzy:
avatar
By Kevin
01st Dec 2014 14:01

I'm trying to...

andrew.hyde wrote:

Does he live over the shop? Or have a separate place of work?  If you happen to go and see him one morning, and the vehicle is parked there, feel the bonnet. If it's warm, ask where it's been that morning.

The other obvious question is whether he has another, 'exclusively private' vehicle.

And lastly, if it's true that all mileage on the vehcile is business, would it be more efficient to have the company own the car and prohibit any private use?

You clearly are not an agent for HMRC, but you nevertheless act effectively as intermediary and ensure fair play on both sides.  Besides that, you perform a significant service to the client by askling the questions HMRC will ask, but before they get the chance.

 

I’m trying to decide if you’re serious or not with this part.

Thanks (0)
avatar
By blok
01st Dec 2014 14:14

.

is the issue the avoidance of the fuel BIK charge on a company car?  if so, I would mention that any private use (unless it was extremely incidental) is likely to be fatal and unless he can prove otherwise he may find himself in a tricky position.  He should keep detailed records to assist with any future argument by HMRC and if doesn't want to then that's up to him. The courts put the onus on the taxpayer to prove the facts, not HMRC.

Thanks (0)
Replying to samnico:
avatar
By andy.partridge
01st Dec 2014 14:34

No

blok wrote:

is the issue the avoidance of the fuel BIK charge on a company car?  if so, I would mention that any private use (unless it was extremely incidental) is likely to be fatal and unless he can prove otherwise he may find himself in a tricky position.  He should keep detailed records to assist with any future argument by HMRC and if doesn't want to then that's up to him. The courts put the onus on the taxpayer to prove the facts, not HMRC.

It's a private vehicle
Thanks (0)
Replying to Tim Vane:
Red Leader
By Red Leader
01st Dec 2014 14:49

not 100%

If he doesn't have access to a second vehicle, then there's no way I'd accept 100%. However, I could easily be persuaded of 100% if he did have access to a second vehicle.

If 100%, then you may be stuck with a pool that never gets down to nil.

Thanks (0)
By stratty
01st Dec 2014 14:28

MOT

I would at least want sight of the last two years MOT to check mileage and ideally a comprehensive mileage log.

Thanks (0)
Replying to The Dullard:
avatar
By andy.partridge
01st Dec 2014 14:59

That's the point

stratty wrote:

and ideally a comprehensive mileage log.

Neither of us is going to get it from this client! So how far would you relax your principles from the 'ideal'?
Thanks (0)
Replying to SteveHa:
By stratty
01st Dec 2014 15:01

Last two MOT certs and check the mileage declared between the two would at least give you a rough estimate.

There has to be some kind of substantiation of the figures.

Thanks (0)
avatar
By KH
01st Dec 2014 14:55

Difficult one, but.....

What I do, purely because it works for me, is send out a Q&A with instructions to answer Qs and then date and sign the form before returning to me. Then, if I get some replies which look out of kilter, I send another Q&A with more detailed specific Qs about the problem areas, plus some background tax info on why I want more info, again with instructions to sign and date the Q&A before returning to me (after having answered Qs, or course) ... this gives me at least two bites at the cherry, and two client signatures to what they claim is the case ... which I think leaves me in the clear, but, just as importantly, gives good notice to my client that I think there might be a problem, and why....... one of my clients calls these the "idiot sheets", but they do seem to make people think twice about potential grey areas.

Thanks (2)
Portia profile image
By Portia Nina Levin
01st Dec 2014 15:07

A) Policeman

B) Auditor

C) Nanny

D) Representative

Thanks (1)
Replying to Bob Loblaw:
avatar
By andy.partridge
01st Dec 2014 17:25

Not the most . . .

Portia Nina Levin wrote:

B) Auditor

C) Nanny

D) Representative
 (Avon)


 . . . memorable acronym, but I will do my best. Unless I have completely misunderstood and it is your CV.
Thanks (2)
avatar
By andy.partridge
01st Dec 2014 15:37

Thanks all

It sticks in the craw to let him off making the same effort that others go to. After all, if that's all there is to it why bother putting others to some inconvenience.

My policy has been to start tough and then relax if appropriate. It's nigh on impossible to do it the other way round.

Good to get different perspectives outside of my bubble. 

Thanks (0)