1DayLater - The Blog

Is HMRC cracking down on people who submit fraudulent claims? Can people really get away with it anyway?

There has been some talk online recently that UK tax body, HMRC are cracking down on fraudulent mileage claims. I tried to find a decent independent source to confirm this but I’m having no luck so far - I’ll update this blog once I do.

It’s fair to say though, that fraudulent mileage claims represent a real problem for HMRC (and for large companies). Mileage Auditing firm; The Miles Consultancy said that in a recent survey of their company database, 25% of employees admitted to giving fraudulent mileage claims.

Now I imagine that once upon a time, people could probably get away with sneakily bumping up their mileage claims for the taxman. However now that we all live in a world of software and automation…I reckon that we are all just blips on a bell curve somewhere…waiting to be analysed!

Thinking back to what I remember about statistics from school, I would hazard a guess that when all of our data gets pulled together by the powers that be, it looks a little something like this graph.

Now I just couldn’t resist a bit of random statistics (non maths-nerds - close your eyes for this bit)

When you have a normally distributed graph like the one shown above, the majority of the population (around 99%) lies within 2 standard deviations of that average centre line. Oooh I remembered some of my school lessons! The gist being that an HMRC statistician could easily identify any people on these extremities!

So, if you’re a taxi driver or a haulage person, your average will be way over to the right hand side as you drive further than most people each week. But of course HMRC will know all of this as they have data from millions of people in all sorts of different professions….

It’s the guys on the far right hand side who the tax office will have their watchful eyes on of course. If you’re over on the left then you’re not claiming enough and should be using mile tracking software; 1DayLater to track your business miles!

Anyway, so the short answer to the question “Can I get away with submitting fraudulent expense claims” = no (in my opinion) shouldn’t be scared of real eyes watching them in this day and age, it’s the statistical eyes that they need to be afraid of!

Mileage claims - are you claiming the right tax relief for your mileage?

Claiming the right amount of tax relief for your business mileage could be saving you hundreds of pounds each year.

Although there are several things you must be aware of, maximising your claim will really just require a combination of good discipline and proper organisation. Here’s how you do it:

Firstly, you will need to find out your country’s Approved mileage rate

In the UK, there are 2 sets of rates depending on the total number of miles you have travelled in any given tax year:

For 0 - 10,000 miles, these rates are:

• 40p / mile - cars and vans
• 24p / mile - motorcycles
• 20p / mile - bicycles

After 10,000 miles, this goes down to: 

• 25p / mile - cars and cans
• 24p / mile - motorcycles
• 20p / mile - bicycles

I have to admit that I laughed the first time I saw this table, kudos to whoever travels more than 10,000 business miles on a bicycle in a year :) I want to meet that guy!

Calculated over an entire year, this could add up to a tidy sum, particularly if you or your staff are often out on the road visiting clients.

The next step now that you know your Approved Mileage Rates is to get in the habit of recording your business trips. - naturally we would recommend 1DayLater for this ;-)

The things you will need to record are:

• Distance travelled (remember to check your cars speedometer before and after you make a trip)
• Reason for the trip and who you visited - you will only be able to reclaim mileage for business-related trips so this is really important.
• Date of journey  

And if you’re lucky enough to have an accountant then that’s it….they should deal with everything else….simply hand over your mileage log or 1DayLater mileage claim and relax. Lovely!