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HMRC to crack down on ‘grey fleet’ operators

Lack of compliance is resulting in fines of up to £250,000…

Grey fleet drivers are employees that drive their own cars for business purposes, or indeed have a company car that can be used for personal use. Due to this mixed use, staying compliant with HMRC regulations can be a mind field.

By law the HMRC states that employees using their own vehicles for work are entitled to receive certain payments free of tax and, if employees receive greater amounts than are allowed, they will pay tax on the excess. Providing evidence of business vs. private mileage for each driver can be extremely difficult without the right systems, leading to large fines and prosecution from HMRC. Many fleet operators are not aware of the hidden challenges grey fleets present.


Our solutions make it easy to track exactly how many miles are taxable. The combination of our powerful reporting portal and the use of privacy buttons, journeys can be categorised into businessand private, allowing you to generate automated reports, saving considerabletime. As journey and mileage capture isautomated for each driver, human error eliminated.

Mars Drinks is a case in point. Originally installing the system back in 2008, Mars has been using it everyday since. As the drinks division of Mars Incorporated, they operate in the UK, France, Germany, USA and Japan; producing over one billion drinks a year. Servicing over 35,000 businesses worldwide, their UK operation involves running a fleet of 150 ‘grey’ vehicles carrying out thousands of visits per annum.

Since installing the monitor system, Mars has reduced their fuel bill by “in excess of 10%”. Steven Ferguson, Regional Technical Manager for Mars Drinks commented:

“Road Angel Fleet listened to what we wanted, and delivered a package to suit our needs. They were not just after a quick sale. We were after a long-term partner that would grow and develop with us, and that’s exactly what we’ve got”.

The roll-out of the system across their fleet did result in some resistance from drivers,however this was quickly overcome through a number of education and training sessions held by Road Angel Fleet at their Head Offices in Silverstone.

Mars has now gained control over their fleet costs as well as their mileage reporting.

Proving compliancy is an increasing for companies such as Mars, due to severalhigh profile cases of firms receiving largefines from HMRC. According to fuel costmanagement specialist TMC, many firmsfail to validate mileage claims before submitting P11D forms.

Paul Jackson, Managing Director of TMChas been quoted as saying:

“It is particularly critical for firms whose drivers buy fuel using fuel cards, and reimburse the company for the cost of private fuel to avoid private fuel benefit.

With over 25% of business car drivers claiming fraudulent miles, we have seena vast increase in demand to consult companies that are being investigated by the HMRC over false or inaccurate claims”.

According to Paul:

“It’s not unusual that on an average monthly £300 fuel expense claim, there is only £6 allocated to private mileage”.

Over the past two years, several UK companies have been fined up to £250,000 for inaccurately reporting on the use of their vehicles.

Audits by HMRC are becoming increasinglyfrequent, and if negligence in reporting isproven, HMRC will view this as an attempt to avoid disclosing private use.

HMRC the Facts

  • An average employee driving 20,000 miles per annum could be costing anything from £1,000 to £6,000 per annum due to inaccurate mileage claims alone.
  • HMRC handed out more than 15,000 fines to business big and small in 2011 for incorrect mileage claims.
  • These fines can be anything from £3,000 per driver per year for up to 6 years, to 10% of turnover.
  • It is the businesses responsibility to prove HMRC compliance.
  • HMRC know that most drivers mileage reporting is not robust enough and will investigate if more than 20% of driver’s claims end in 0.

In one reported case, a firm incurred a £250,000 fine after an HMRC inspection revealed that mileage reports from 35 drivers were incomplete or inaccurate.

Find out more

Road Angel Fleet provide a range of vehicle tracking and fleet management solutions for fleets of all sizes and requirements. Call us on 01327 855586 or visit our website to find out more.

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