What do I need to know about HMRC requirements on a mileage log? Let’s review the concepts.
What is a mileage log?
Mileage logs serve as evidence that the journeys with the vehicles will be documented correctly.
A mileage log is a document (digital and physical where it is noted, how far, where and why an employee has driven the company car. HMRC view your driving record as evidence that the journeys have been conducted correctly as a basis to review car benefits of different kinds, and recommend the usage of an electronic mileage log.
The rules for mileage logs are based on tax legislation and therefore the reverse burden of proof applies. It is always up to the taxpayer to prove that the documentation is correct and it is often a strong reason why one would choose an electronic mileage log that registers car journeys automatically by using smart GPS-devices installed in the vehicles.
Why do I need a mileage log?
According to HMRC, those who use company cars are required to log date, purpose, start point, destination and total miles travelled. A mileage log can be electronic or written on paper, but the most common practise is that companies use an electronic mileage log that is connected to the vehicle and registers all journeys automatically. For tax purposes, you can summarise the main reasons why you need a mileage log:
- Keep accurate records for tax purposes. For private driving, you’ll pay tax if you or your family use a company car for private journeys, including for commuting. If you as the owner or employee have a company car, make sure the rules are followed in order to provide correct tax documentation.
- Track taxable mileage. If you have a car provided by your company you can claim back mileage for your business travel and / or fuel.
- Save time and stay in control. Save time on the road with the digital tracking of mileage and stay in control of complying with taxation requirements.
This is how it works
What should a mileage log contain?
On HMRC’s website you can read that the following information for each completed journey needs to be evident in the mileage log.
- Journey date logged.
- Purpose of journey (business or personal) logged.
- Start point of journey
- Destination of journey
- Miles travelled during journey
Electronic mileage log increases efficiency
Upon introduction of electronic mileage logs it is common for a company to reduce their vehicle costs significantly. A potnetial reduction between 10-20% is realistic. This is mainly due to reduced private usage and therefore a reduction in fuel costs and wear on the vehicles.
The reports that are generated can also be used as an invoice basis for discussions with customers, which in turn saves time and increases trust. It can also help your company to make better decisions about how many vehicles you need and if you can optimise the planning of your journeys and thereby get a more efficient resource usage.
Important to keep in mind when choosing a mileage log
Do you plan on investing in electronic milage logs? There is money to be saved and you can ensure the correct tax is paid. Here is a list of things to think about prior to choosing a supplier.
- Simplicity. What are you going to use the milage log for? Is it to fulfil HMRC’s requirements on documentation or do you want to use it to manage your business? Many suppliers offer a variety of different functions within their products that reduces user-friendliness. Choose a supplier that offers a simple user interface and that doesn’t charge for superfluous functions that you do not have any need for.
- The price. Some vendors in the market have been around for many years and have incorporated unnecessary functionality leading to inflated prices. As technology has advanced the opportunities have opened up for more cost-efficient solutions. Today the prices range between 79kr/month up to over 250 kr/month per unit. This expenditure can quickly add up, particularly if you have a large fleet of vehicles. It is worth carefully comparing supplier prices, and keeping an eye out for concealed start-up costs and long contracts.
- Devices. Make sure that the company you are buying from offer different types of devices so that you have the opportunity to change device in the future if a need would arise. The world is changing faster and new rules and clauses are emerging with the insurance companies that affect warranties and such. Choose a company that offers devices for your needs. If the company has a need for driver identification, make sure to choose a supplier for both RFDI-reader and GPS-device in one, so that you can avoid installing two devices in each vehicle. WorkMirror offers four different types of devices for different needs. OBD-unit that is placed in the vehicles diagnostic socket.
- Battery mounted device that is placed directly on the car battery. 12V-device that is placed in the car’s cigarette lighter power socket and a RFID-device that supports driver identification.
Common questions and answers
At the present time you do not have to, but HMRC state that they recommend all businesses to utilise an electronic mileage log for accuracy.
According to HMRC, the documentation needs to be saved for a minimium of 5 years after the yearly submission date.
There are mainly two areas where the potential costs savings are great. Partly because the proportion of private journeys usually decreases upon introduction of an electronic mileage log system. 2) And also, through optimisation of the vehicle fleet. By seeing how the vehicles are used you can more easily adjust the number of vehicles based on reality. The savings vary from case to case but it is not unusual to find cost savings of between 10-15% when you introduce an electronic mileage log. Besides this you will most likely save money just by switching to WorkMirror. We offer significantly lower prices (79kr/month) than most competitors in the market (149-249kr/month)
With WorkMirror Mileage Log you will get
Automatic Mileage Log
With WorkMirror you will get the easiest to use and most cost-effective electronic mileage log. You get a clear picture over your vehicle fleet, how many vehicles have been driven and how they have been used.
We meet HMRC's requirements for documentation for mileage logs.
Full support for driver identification with RFID. Also integrated together with the GPS-unit, so you still only need one device.
Quick start up
We offer a simple installation where you connect the device in the vehicle in just a few seconds. With our smart import functions, you will get going quickly.
Our strategy is to is to keep prices significantly lower than our competitors. In many cases you can half your costs for both devices and mileage log by choosing WorkMirror.
Smart map views where you can view all your vehicles at a glance. Where they are and if they are driving. With the possibility of filtering on vehicles for a quick follow up.