The many ways of reporting mileage
Mileage reporting is in my thoughts this month. Mindful of the fact that HMRC declared an intention to step up their checks on company business records generally, I had been keen to confirm our mileage reporting systems were in good order. If HMRC is seeing less revenue from company tax, as emissions drop, then ensuring they are getting their appropriate whack from other related areas will logically move higher up their list of priorities.
A few years ago we were picked up on our reporting of mileage driven in pool cars and in particular, how we could prove all miles were indeed accumulated on business. For, of course, a pool car cannot be such if there is private use and a taxable benefit would arise. People weren’t using the pool cars socially, we just hadn’t nailed accurately reporting the journeys. That was easily remedied by redesigning our pool car use form to include date of trip, start and finish mileage, postcode destinations and reason for journey – all before HMRC’s representative had left the building.
But it’s not just HMRC who needs appeasing. The cost of fuel is a major portion of any fleet’s budget and we can tackle reduction in several ways. We can coax our employees to drive more efficiently. At the time of writing, the Energy Saving Trust is still offering its Smarter Driving programme – a 50-minute one-to-one drive with an expert. They reckon most fleets will save between 5-15%, and the subsidised cost is minimal.
We can stop making journeys altogether by use of video-conferencing, which we do for many internal meetings, and we can use satellite navigation or telematics to reduce mileage by efficient route-planning, with the latter often also having the ability to capture and split miles driven.
Then there is the uncomfortable fact that, without good reporting systems, it’s not uncommon for less constrained drivers to over-estimate their business mileage by anything up to 10% or more.
There are any number of ways to capture mileage now, from keeping paper-based records ourselves, to smartphone apps. Some work better than others. But the beauty of using specialist programmes is that mileage can be easily recorded, split as business and private, and distances verified. It cuts down intentional inaccuracies at a stroke, and usually simplifies administration.
At one point I tried using our fuel card reports to work out average fuel consumption, thinking I could also use these to set up a fuel reimbursement system based on mileage driven and work out an actual cost per mile against fuel purchased. But I got some strange answers. If the mileage was entered inaccurately – by the driver or the filling station operative – or if the card was legitimately used to fill up a colleague’s car, or a temporary hire car, the end results proved startling.
More startling still was the report that suggested one employee was regularly putting 85-90 litres into a 70-litre tank. We took the obvious steps and interrogated the surprised driver – who was able to produce receipts for all the refuels we queried, showing no more than 60 litres purchased at any time. It turned out the fuel card provider had a problem with their software, which was adjusting figures to get the correct monetary answer. This was outside the UK, and resolved pretty quickly. I was surprised other customers hadn’t queried their bills though for it clearly wasn’t a one-off.
All this satisfied me we would need a more robust reporting system for reimbursement and I’m pleased to say that after investigating and trialling a number of different systems on the market, we have now made a decision and I’m looking forward to seeing how accurate the savings predictions are. I hope I’ll be pleasantly surprised.