What is the correct way to reimburse fuel costs? How much does each private mile ‘cost’? How should the mileage be monitored? This article will explore these frequently asked questions.
Where the employee is required to make good the cost of all fuel provided for private use of company van, (Condition A of EIM22920) the business must ensure suitable measures are in place to administer either one, or combination of the ways described below:
Often the catalyst for an HMRC audit is when they believe that vehicle mileage has been overpaid due to inaccurate reporting, overestimation or fraud. The task of HMRC is to ensure that you pay the right amount of tax – so if there is an over payment of mileage it effectively means tax-free monies have been paid to an employee.
A Company Van (Light Commercial Vehicle, LCV) is used to carry loads with a maximum weight capacity of 3500kg, not including Heavy Goods Vehicles (HGV). Company vans are available to employees and are purchased or leased by the company (drivers do not own the vans).