INNOVATION PROFESSIONAL SERVICES

𝗪𝗵𝗮𝘁 𝗗𝗼 𝗪𝗲 𝗗𝗼 - #𝟰 𝗘𝗩 𝗣𝗼𝗹𝗶𝗰𝗶𝗲𝘀, 𝗘𝗩 𝗖𝗵𝗮𝗿𝗴𝗶𝗻𝗴 𝗣𝗮𝘆𝗺𝗲𝗻𝘁 𝗮𝗻𝗱 𝗔𝗰𝘁𝘂𝗮𝗹 𝗖𝗼𝘀𝘁 𝗥𝗲𝗶𝗺𝗯𝘂𝗿𝘀𝗲𝗺𝗲𝗻𝘁 𝗳𝗼𝗿 𝗖𝗮𝗿𝘀 𝗮𝗻𝗱 𝗩𝗮𝗻𝘀   It’s well known that the AER rate isn’t fit for purpose when it’s applied broadly across EV fleets. This leaves those who need to use public charging at a disadvantage when the AER doesn’t cover the actual cost of the business mileage being driven. We advise our clients to think about their EV policy as early as possible during their transition to EV. Whilst paying expenses at the AER rate will be sufficient for the early adopters, who generally tend to be able to charge at home, issues will arise further down the line. Employees who can’t charge at home or drive significant mileage that they need to use the public network as part of their daily role will become frustrated at the ‘underpayment’ they are receiving for their business mileage. Many of our clients and their drivers are familiar with our methodology, whereby the employer pays for all fuel purchased via the fuel card and the employee repays any private usage. As a result, we have produced a solution to replicate this methodology for EV’s, albeit employers now pay for all charging as opposed to fuel. There are three main sources of charging – Home, Workplace and Public Network. Whilst many fleets have solutions for workplace and public charging, paying for the home charging costs creates the biggest challenge. We provide the following options: ·        𝗔𝘂𝘁𝗼𝗺𝗮𝘁𝗲𝗱 𝘀𝗼𝗹𝘂𝘁𝗶𝗼𝗻 – Innovation have partnered with providers who have created software to interact with the employee’s home charge point to determine the amount of KWH used per charge session and use the employee’s electricity tariff rate to calculate the cost. At the end of each month a credit is applied directly to the employee’s utility bill for the cost of electricity used to charge their vehicle. ·        𝗠𝗮𝗻𝘂𝗮𝗹 𝘀𝗼𝗹𝘂𝘁𝗶𝗼𝗻 – Drivers can record any costs incurred and log these as ‘Non-Fuel Card Transactions’ on Traxmiles. Drivers should be able to extract details of their charge sessions from their home charge point and apply their tariff rate to calculate any costs. Any costs logged on Traxmiles can be reimbursed in the following payroll. Now that all charging has been funded by the client, we’re able to use Traxmiles records, cross reference these with any charging costs and deduct any private mileage costs at the actual rate, which in turn results in the driver’s business mileage being paid at the actual rate. Alternatively, in some cases, in recognition that the inability to charge at home will lead to greater private mileage costs, clients have decided to deduct private mileage at the AER rate.

𝗪𝗵𝗮𝘁 𝗗𝗼 𝗪𝗲 𝗗𝗼 - #𝟯 𝗣𝗿𝗶𝘃𝗮𝘁𝗲 𝗠𝗶𝗹𝗲𝗮𝗴𝗲 𝗥𝗲𝗽𝗮𝘆𝗺𝗲𝗻𝘁 𝗮𝗻𝗱 𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗠𝗶𝗹𝗲𝗮𝗴𝗲 𝗘𝘅𝗽𝗲𝗻𝘀𝗲𝘀 Now that all business mileage journeys have been entered on Traxmiles and been reviewed for HMRC compliance by us, we are able to calculate any private mileage repayment figures or business mileage expenses that need to be processed in the next available payroll. Depending on client preference, we operate several different processes to ensure the repayment of private mileage costs for drivers who have a fuel card. Typically, prior to engaging with Innovation, many companies deduct private mileage costs one or two months in arrears. However, this comes with some complications. For example, if a driver is late submitting their mileage for the month, do you deduct the full fuel card spend? Another issue arises when a driver leaves employment as there are no further payments to deduct their private mileage costs from. This results in the cost of private fuel being underpaid and risks a fuel benefit-in-kind charge being due for the whole tax year.   To avoid the above, we encourage clients to adopt our ‘Fuel Card Optimiser’ methodology. This involves collecting a payment on account each month. We carry out various checks throughout the year to ensure the deducted amount is sufficient based on the mileage recorded on Traxmiles. At the end of the tax year we complete a reconciliation to ensure the correct amount has been re-paid by each driver. Our methodology is employee friendly as it doesn’t punish those with a large one-off deduction if they are late submitting their monthly mileage and allows drivers to spread the annual cost of their private mileage evenly over the year. Where drivers do not have a fuel card and instead claim business mileage expenses, we provide these figures to payroll following our compliance review. Traxmiles stores the prevailing HMRC AFR & AER rates, so the correct rates are applied to each journey based on the date of travel. Traxmiles also has the capability to store ‘Custom Rates’ where a client has decided to pay expenses at a different figure to the HMRC AFR & AER rates. Finally, we can store fuel card and non-fuel card purchases on Traxmiles which allows us to pay expenses to drivers at the actual rate of cost. This is especially useful for EV drivers where the AER rate does not cover the cost of the energy used for business mileage. 

𝗪𝗵𝗮𝘁 𝗗𝗼 𝗪𝗲 𝗗𝗼 - #𝟮 𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗠𝗶𝗹𝗲𝗮𝗴𝗲 𝗥𝗲𝘃𝗶𝗲𝘄𝘀   Once users have entered their business mileage and finalised their monthly record on Traxmiles, we carry out our unique business mileage reviews to ensure HMRC compliance. We pride ourselves on checking 100% of journeys that are entered on Traxmiles. Our team of experts review each journey to the same standard, if not higher, than HMRC would. This gives our clients peace of mind that all business journeys being recorded by their employees are compliant. We provide our clients with an annual report detailing the number of journeys we have reviewed, the number of queries raised and the amount of non-compliant mileage that was removed. Some of the areas that we check during our reviews are: ·        𝗖𝗼𝗺𝗺𝘂𝘁𝗲𝘀 – Any journeys between a home location and a permanent place of work should not be recorded as business mileage. ·        𝗗𝘂𝗽𝗹𝗶𝗰𝗮𝘁𝗲𝘀 – We ensure that any duplication of journeys are queried and removed if required. ·        𝗠𝗶𝗹𝗲𝗮𝗴𝗲 𝗗𝗶𝘀𝗰𝗿𝗲𝗽𝗮𝗻𝗰𝗶𝗲𝘀 – Assisted by Traxmiles and its integration with Google Maps, we can identify any journeys where the mileage seems excessive. ·        𝗝𝗼𝘂𝗿𝗻𝗲𝘆 𝗣𝘂𝗿𝗽𝗼𝘀𝗲 & 𝗟𝗼𝗰𝗮𝘁𝗶𝗼𝗻 𝗘𝗿𝗿𝗼𝗿𝘀 – Where users provide vague or generic journey purpose descriptions and locations, we aim to educate the user on how they can improve these for future entries to satisfy HMRC requirements. ·        𝗪𝗼𝗿𝗸 𝗟𝗼𝗰𝗮𝘁𝗶𝗼𝗻 – Part of our review focuses on the employee’s work location to ensure this is up-to-date and correct. We monitor the 40%/24-month rule for determining when a work location changes from temporary to permanent. This is especially useful for clients where employees may move from site to site for varying periods of time.

𝗪𝗵𝗮𝘁 𝗗𝗼 𝗪𝗲 𝗗𝗼 - #𝟭 𝗧𝗿𝗮𝘅𝗺𝗶𝗹𝗲𝘀 The first post in our series is about Traxmiles. Traxmiles is our award-winning mileage capture system which was designed and built in-house. Following the launch of Traxmiles, it won the ‘Best Digital Innovation’ at the Tolley Taxation Awards in 2020. Traxmiles was designed to help make the recording of business journeys as simple and pain-free as possible. Whilst many see the recording of business mileage as an onerous task, Traxmiles removes much of the admin for both the driver and for our clients. Utilising the GPS capabilities of the user’s device, Traxmiles can automatically capture all journeys thanks to our unique ‘Drive Detection’ functionality. All detected journeys are visible to be swiped right if they are business or swiped left and deleted if they are private. Alternatively, drivers can use GPS to manually track their journeys by selecting ‘GO’ at the start and ‘STOP’ at the end. Once all business journeys have been entered for the month in question, our highly skilled compliance team can review the entries for accuracy and to ensure they meet HMRC guidelines (more on this next week). We’ve attached a short video to show some of Traxmiles' capabilities. If you would like a demo or a free trial, please get in touch via [email protected]

We’re pleased to announce that we will again be exhibiting at the Association of Fleet Professionals (AFP) Member Expo. This year’s expo takes place at the Telford International Centre on Wednesday September 25th. In the lead up to the event, we will be sharing a weekly post every Wednesday at midday. Each post will take a closer look at a specific service that we offer. The areas we will be covering are: ·        Traxmiles – Our award-winning mileage capture App ·        HMRC compliant mileage reviews ·        Private mileage repayment and business mileage expenses ·        EV policy, charging payment and actual cost reimbursement for cars and vans ·        Car Allowance RME refunds and correct NIC treatment going forwards We hope to meet and catch-up with as many people as possible at the AFP Member Expo. If any of the above topics and future posts are of interest, please feel free to drop by our stand to discuss. We have placed a link to register for the Expo in the comments section of this post.

𝗖𝗮𝗿 𝗔𝗹𝗹𝗼𝘄𝗮𝗻𝗰𝗲 𝗥𝗠𝗘 𝗖𝗹𝗮𝗶𝗺𝘀 – 𝗘𝗺𝗽𝗹𝗼𝘆𝗲𝗿 𝗖𝗹𝗮𝗶𝗺𝘀 𝗦𝗲𝘁𝘁𝗹𝗲𝗱 As we approach the anniversary of the successful Laing O’Rourke/Willmott Dixon case with HMRC at the Upper Tier Tribunal, clients are now starting to see their claims being settled. In this landmark case that clarified the law, HMRC is working diligently to ensure these claims are settled quickly. Over the past few weeks, several of our clients been notified by HMRC that their claims have been successful and have subsequently received their settlements, which include interest, benefitting both the client and their employees. Following the outcome of the Tribunal, HMRC notified employers in December of 2023 about the clarification of the law, encouraging employers to make their claims, having set up a working group to complete the processing. We have a proven track record of helping our clients review and submit their claims, ensuring that the data being submitted is the format that HMRC has requested, with clear and concise calculations. This has helped keep the period between submission and refund to a minimum. We would be more than happy to help if you need any support in submitting a new claim or with an existing claim. We can also help going forward to ensure you are paying the correct amount of NIC on car allowances and avoid the need for any further claims in future. #RME #CarAllowance #HMRC

Act now!

𝗖𝗼𝗺𝗽𝗮𝗻𝘆 𝗖𝗮𝗿 𝗣𝟭𝟭𝗱 𝗦𝘂𝗯𝗺𝗶𝘀𝘀𝗶𝗼𝗻𝘀 – 𝗛𝗼𝘄 𝗔𝗰𝗰𝘂𝗿𝗮𝘁𝗲 𝗶𝘀 𝘆𝗼𝘂𝗿 𝗗𝗮𝘁𝗮? Many businesses rely on their leasing provider to supply their company car P11d data. Trusting them not only to provide the correct data but to have also kept track of any car changes during the year. However, this data isn’t always as accurate as it should be! For the past few years, we have been completing various checks for our clients on their P11d company car data. Our API integrations have been able to compare the data provided to us, to the data that is held by the DVLA and UK Vehicle Data. The results have been quite surprising. We rarely receive a set of data that doesn’t have multiple discrepancies, with mismatches in the following areas the most common: • 𝗖𝗢𝟮 𝗴/𝗸𝗺 𝗲𝗺𝗶𝘀𝘀𝗶𝗼𝗻𝘀 – For cars with CO2 emissions greater than 50g/km, the taxable percentage increases every 5g. If you have the wrong CO2 figure you could be under or overpaying in Class 1A NIC and your employee could be in the same situation in relation to income tax. • 𝗕𝗮𝘁𝘁𝗲𝗿𝘆 𝗿𝗮𝗻𝗴𝗲 – For hybrid cars with CO2 emissions of less than 50g/km, the taxable percentage is determined by how far the car can be driven on battery power alone. With the percentage varying from 14% to 2%, having the wrong figure (or none at all) will affect the amount of Class 1A NIC you pay and the amount of income tax your employees pay. • 𝗥𝗗𝗘𝟮 𝗰𝗼𝗺𝗽𝗹𝗶𝗮𝗻𝗰𝗲 – For diesel cars who don’t meet the RDE2 compliance requirements there is an additional 4% supplement added to the taxable percentage for the car. Again, not knowing RDE2 status of your diesel cars may result in the incorrect taxable benefit being reported on the P11d. • 𝗘𝗻𝗴𝗶𝗻𝗲 𝘀𝗶𝘇𝗲 – Although engine size doesn’t have an impact on the P11d submissions, many companies pay business mileage expenses or recover private fuel costs from employees using the HMRC AFR rates. These AFR rates are determined based on fuel type and engine size. If you have the wrong engine size, then you may be paying expenses or reclaiming private mileage using the wrong amount. The current AFR rates vary between 12-19p for diesel and 13-24p for petrol cars. If you’d like to have your company car data checked before you submit your 2023/24 P11d’s, contact us at 𝗜𝗦𝗖@𝗶𝗻𝗻𝗼𝘃𝗮𝘁𝗶𝗼𝗻𝗹𝗹𝗽.𝗰𝗼𝗺. #CompanyCar #P11d #Innovation

WE HAVE A WINNER!!!! Following the prize draw we ran at The Great British Fleet Event, we now have a winner! Thank you to everybody who visited us on the day and entered the draw. If you have any further queries about anything we discussed with you on the day or, would like to learn more about how we can improve your business mileage recording compliance, assist with your business mileage expenses and how we generate savings for our clients and their employees, please don’t hesitate to get in touch at [email protected] Congratulations to our winner, we will be in touch shortly to arrange delivery of the Fortnum & Mason wine hamper prize.