Mileage log book


Tax law in UK

Any tax related information is meant as a reference only.1


In the UK, employees often end up paying dearly for the private use of company vehicles, because the non-wage benefit is subject to income tax as part of the employee's wages. Private use of company vehicles also has a cost for employers, who are liable to pay extra National Insurance charges.

TomTom Telematics enables you to save money on your fleet management by implementing a mileage log book.


Log book for private cars

Log book for private cars

For compliance purposes, employees should keep an accurate record of their business journeys, for example, using a log book.

Employees using their own cars for business journeys can claim up to 45p per mile tax-free for the first 10,000 miles, 25p per mile thereafter, with a supplement of 5p per mile if sharing the car with a business colleague.

Mileage log for company cars

There are two types of taxable benefit, or benefit in kind, arising from company cars.

The best way for employees to demonstrate tax compliance is to keep an accurate record of all private trips made.

Car benefit

If an employee has private use of a company car, he/she will pay income tax at rates on the benefit in kind. The value of the benefit is calculated using the list price value of the car, the CO2 emission percentage, and fuel type. Car benefit is also an important factor to consider for employers, as they must pay 13.8% of the value of the car benefit in National Insurance Contributions.

Fuel benefit

A fuel benefit applies if the employee is provided with free or subsidised fuel for private travel. The charge is calculated using the same percentage as the car benefit, on a flat amount of £22,600 for the 2017/18 tax year, which often leads to a significant tax/National Insurance bill.

Usage of log book for company vans

Usage of log book for company vans

Employees may use a van for insignificant private use such as commuting to work, without having to report it or pay any duty to HMRC.

If a company van has zero private use, HMRC expects employers to be able to provide supporting evidence. As an employer, the best way to stay compliant is to require your employees to maintain a mileage log.


Mileage log for pool cars or van

Why to maintain mileage log for pool cars or vans?

HMRC defines a pool car or van as a vehicle available for work purposes to more than one driver, and not used for any significant private activity. If the vehicle is being used for significant private activity, then it falls under the same tax classification as a company car.

To avoid doubts, a good practice is to maintain a mileage log including information about locations visited, the reason for the journey, the name of the driver, and set out a clear policy for employees who have access to the vehicle.


Administrative requirements

UK tax year

The UK tax year runs from 6 April to the following 5 April.

A comprehensive guidance of the tax legislation in the UK is available on HRMC’s website http://www.hmrc.gov.uk/cars/index.htm.

Record-keeping

HMRC expects employers (and employees) to keep six years’ worth of records related to benefits in kind, which means an electronic mileage log book is an ideal tool for having error-free and easy-to-access data in the event of a tax audit.

Mileage log book free tax guide for the UK

Tax guide for the UK – Download it for free

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1 While TomTom Telematics (TTT) and Grant Thornton UK LLP (GTUK) have sought to ensure that the information contained in this guide is accurate, the content is not intended to be legally or technically comprehensive and neither TTT nor GTUK shall be held liable for any errors or omissions. The contents of the guide should be used for reference purposes only and both TTT and GTUK recommend that no action be taken on any matter in the guide without the reader taking independent professional advice. The information in the guide is based on current tax rates, legislation and HMRC's practice as at the date of the guide which may be subject to future change. The information in this guide has not been prepared to take into account the reader’s individual circumstances. To ensure compliance with your tax obligations, always seek individual advice from a legal counsel or a qualified tax compliance specialist. For the avoidance of any doubt, TomTom Telematics does not warrant or imply that the use of its products or services can in itself guarantee compliance with your tax or legal obligations.