Are Your Drivers Fiddling Their Mileage Expenses?

Posted By: TMC - 1st April 2016

Honesty is the best policy, but even upstanding company drivers can stray when claiming fuel expenses. Driver practices vary from rounding up trip distances to the nearest 10-mile increment, to outright claiming the wrong fuel rate and filling a private vehicle on business expenses.

Small inaccuracies will lead to huge losses

A little jiggling of the figures might not sound like much of a problem.

After all, how much of an impact can it make when a driver rounds up to the next 10-mile increment? Well, if a driver covers a 33-mile journey and claims for 40 miles, that’s a 21% additional cost to the company.

If you extend that across three such journeys per week for a fleet of 300 vehicles, the costs spiral. It might only be an extra £2.50 per vehicle in a week, but for the fleet it adds up to £750 every week. In a year, this costs your business £39,000. Wow. Suddenly, that small expense becomes a major financial loss to the business.

5 common fuel fiddles to watch out for

  1. Deliberately claiming the wrong mileage rate. A driver who should be claiming at 12p per mile but who puts in an expenses sheet at 15ppm is collecting 25% more for every claim and that is coming out of the company’s pocket.
  1. Sharing a journey with another driver and then both drivers claim the mileage. These “ghost trips” are common practice for many drivers and doubles the cost for a business.
  1. Making unnecessary journeys to boost income by claiming for more miles. Where company’s offer a generous pence per mile rate, this is an even greater problem as the rewards are higher for a fraudulent claim.
  1. Filling up another car or jerry can using a company fuel card. This can be very difficult to detect as its easy to hide the added cost in an expenses claim.
  1. I’ve got telematics, so I have no issues. Unfortunately, just because a telematics solution is deployed, this doesn’t mean that the telematics data is being matched with the fuel card spend to ensure the fuel being paid has actually gone into the tank.

These issues exist because drivers think they can get away with it, either as a small but accepted part of their expense process or because they consciously want to exploit the system.

Would your records withstand HMRC scrutiny?

Unfortunately, the practice is hard to eliminate, even when the fleet manager has the expertise to spot fuel fraud. In most companies, the duty of checking mileage claims normally falls to line managers who usually do not have the time, knowledge or necessary data.

All of these challenges are compounded when a company uses paper receipts and spreadsheets to calculate fuel rates and claims. The sheer volume of information generated by thousands of trips and claims is overwhelming when trying to manage claims using desperate spreadsheets.

Yet the penalties for not getting it right are serious for both driver and company. A driver could be left liable for Benefit in Kind tax if they claim for fuel not used for business, while a routine audit by HMRC could cost the company in back payments and interest for tax as well as fines.

How can you eliminate fuel fraud?

What can you do to prevent drivers making fraudulent fuel claims while not drowning in a sea of paperwork? Fortunately, you can eliminate all your spreadsheets, streamline your processes and stamp out fuel fraud by using TMC’s Mileage Capture, Audit and Control solution.

The solution combines an easy way for drivers to log mileage, algorithms to spot discrepancies and a customer service team that contact drivers when suspect trips and mileage are recorded.

The solution pulls in data from a variety of sources including fuel card spend and telematics feeds. The data is collated and analysed in a variety of different ways. TMC can identify excessive claims, rounded-up zero mileage claims or side fills, and this helps to eliminate fuel fraud all together within your business.

To find out more about how TMC’s data expertise can be applied within your own fleet please contact us today.