Related Links:

Latest News ...

Save Yourself End Of Year Reconciliation Headaches, Says Opticar

Companies running car fleets where cash allowances are offered are still suffering unnecessary pain and avoidable tax bills because of outdated fleet administration systems, which result in last minute end-of-year mileage reconciliations, according to mixed fleet specialist Toomey Opticar.

Under cash schemes,  where an employee receives a monthly sum from their employer to spend on a car of their choice, business miles driven qualify for tax and national insurance-free approved mileage allowance payments (AMAP).

But while many schemes continue to make AMAP payments to drivers during the year based on expected business mileage,  HM Revenue & Customs (HMRC) require the matching of precise monthly records to prove that AMAP payments are accurate and timely. Every year, this forces companies into costly and complex end-of-year mileage reconciliation exercises - and  the inevitable hefty tax bill that comes from it.

Peter Eldon of Toomey Opticar says that the result is “a painful and time-consuming” year-end reconciliation that potentially reveals costly overpayments of AMAPs. He says: “We have come across cases where businesses find they must pay back hundreds of thousands of pounds to HMRC, and that’s without the lost and unrecoverable underpayments from inaccurate administration during the year.

He says the solution is a system such as Toomey Opticar’s Optifleet, in which drivers log their mileage each month online. Toomey Opticar uses the information to calculate each driver’s exact tax and national insurance payments and the appropriate claimable AMAPs, reporting the monthly data back to the client company’s payroll department.

Peter says: “Because these AMAPs are paid in direct relation to the business mileage logged, there is no underpayment or overpayment. Paying AMAPs as they are accrued, plus the strict observance of tax and national insurance regulations, delivers 100% tax optimisation and 100% HMRC compliance.

“This leads to significant savings throughout the year and avoids all the hassle of appointing a team to sort out the mess at the year end. Our clients are comfortable in the knowledge that their scheme is being administered with optimum efficiency and full HMRC compliance.

“Efficient mileage management and record-keeping in this way is a key factor for any business that wants to avoid year-end tax reconciliations or worse still, HMRC investigation. “

The Optifleet solution can manage every aspect of a company car scheme, starting by directing the employee to the most cost-effective car option for their mileage profile, and maximises benefits for employers in terms of cost, tax and administration.

The mileage logging and payroll reporting module is available as a stand-alone implementation.

For more information call 01582 518181.