Business mileage, a grey area for grey fleets?

If personal vehicles are used in the course of work, then owners may be entitled to a mileage allowance. The vehicle may be a car, van, or motorbike. This allowance may be eligible for tax relief, provided it meets HMRC criteria. But when making a claim it is essential to be aware that not all travel counts as business mileage.

Grey fleet is the term used to describe any vehicles that do not belong to the company, but which are used for business travel. This might include a vehicle purchased via an employee ownership scheme, a privately rented vehicle or a vehicle privately owned by an employee. When they are driven on company business, often in return for a cash allowance or fuel expense, these vehicles then become considered part of the ‘grey fleet’ – and as such fall under the responsibility of the employer who has the responsibility to reimburse grey fleet mileage expenses.

The difference between business and private mileage
Business mileage refers to journeys undertaken in the course of work, with the exception of a regular commute. HMRC guidelines define travel between home and a regular, permanent place of employment as a non-work journey, making it ineligible to be included as part of a business mileage claim. For example, if you drive from your home to your office, visit a client, return to your main place of employment, then drive back home, the first and last journeys cannot be counted as business mileage. However, if you leave home and drive straight to a client, travel from that location to your office, then drive back home, you may be able to claim for the first two journeys, provided you can demonstrate that they represent a significantly different journey to your usual commute.

Private mileage refers to travel between your home and permanent place of work outside your usual hours, or any other private trips that you make. These journeys cannot be counted within your business mileage allowance.

Accurate mileage capture has been at the forefront of Fleetinsight’s development plans for 2014/15. The newly launched Fleetmiles is a unique fleet mileage expenses management system which uses GPS technology to automatically capture business journey data with configurations which completely exclude private journey data. Unlike other systems on the market, Fleetmiles is dongle-free. The system can be fully configured to allow companies to automatically record accurate business mileage without the need for endless scrutiny or paperwork.

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