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In the Spotlight |
| Worse than keeping a Mileage Log: An I.R.S Audit |
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Of all the annoyances business travelers have to endure while on the road, not one comes close to keeping a mileage log. Airline and hotel troubles come and go, but tracking business miles is a constant.
Most business trips are done by car, and the vehicles most often used are personal or company cars in which every mile must be painstakingly recorded for tax purposes.But with the filing deadline for individual tax returns looming in April, mileage logs are turning into more than a nuisance; accounting analysts say they expect the Internal Revenue Service to be doing more audits this year, and drivers with spotty mileage records may be one group singled out.
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| Irish Revenue Crackdown |
A number of audit firms in the Republic of Ireland have reported an increase in the request for logbooks and service records from Revenue Auditors. In responding to a query regarding the common practice of deducting 5,000 miles from the annual total to arrive at an annual figure for business mileage, Chariman of the Irish Payroll Association, Mr. Eamonn Corcoran says that 'In our experience this is the most commonly held misconception amongst employers and accountants and it could end up costing them dearly in the event of a Revenue PAYE Audit'.
Fran Power, head of Interpretation and Legislation for the Revenue Commissioners says that 'Where an employee claims that his or her private mileage is less than 5,000 miles in the year, the employer must calculate the taxable benefit by reference to a minimum of 5000 private mileage unless the employee provides evidence (which must be retained by the employer) to show that the private mileage is less.
Acceptable evidence would be a log book of business journeys and mileage involved or some other form of account of the business miles done. The private mileage can be calculated by deducting the recorded business mileage from the total mileage according to the milometer reading'.
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| Mileage Fraud on the Rise |
COMPANY car drivers fiddling their mileage claims are contributing to an expenses fraud that is costing UK businesses billions of pounds a year. Although only a small part of overall fraud, fleets are warned that it was common practice for company motorists to ‘round up’ their business mileage expenses claims while keeping their fingers crossed that they will not get caught.
It is estimated that fraud could account for 6% of a company’s turnover – costing a small to medium-sized enterprise with a £10 million turnover up to £600,000 every year.Up to 45% of companies are victims of expense fraud and fleets are being urged to put systems in place in a bid to stamp out the problem.
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 Copyright © Benchmark Fleet Services Ltd, 2006. |
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