We have written on several previous occasions about court rulings concerning the business nature of car journeys. The basic principle is that the private use of a company car is included in your income. This does not apply if you can demonstrate that you have driven the car for private purposes for less than 500 kilometres. To prove this, you must provide a tight-fitting keep a record of journeys.
Mileage records
Following yet another court ruling, it should be clear that accurate journey records are of great importance. A journey log must contain the following details:
- the make and model of the car;
- the car’s registration number;
- the period during which the car is at your disposal;
- the journey details for each individual journey.
The journey details
The data for each journey must include at least the following information:
- the date;
- the starting and ending readings of the odometer;
- the departure and arrival addresses;
- if you do not take the most common route, you must state which route you took;
- the nature of the journey: private or business;
- the distance travelled for private purposes when both business and private journeys are undertaken during the same trip.
Every single journey counts as a trip. If you drive from work to a client and then back to work again, these are two separate trips that you must record individually.
Sometimes, a simplified journey log is sufficient for a delivery van. If you’d like to find out more, please click here For further information.
Tax authority audit
For example, the Tax and Customs Administration uses the following data to check the journey log:
- office diaries;
- route planners;
- garage bills;
- order slips.
This information serves as evidence for the journey log. It is therefore advisable to keep these records for at least 5 years. In addition to this information, the Tax and Customs Administration uses, amongst other things, speeding fines and CCTV footage from large car parks as part of its checks. It is therefore not possible to classify the kilometres driven – relating to a day trip to the theme park – as business kilometres.
Black-box System
A black-box system is an automated system that helps you keep a record of your journeys. The system records exactly how many kilometres were driven, where and when.
The tax authorities accept the system as a tool for journey logging. However, they do stipulate as a key requirement that the black box cannot be switched off. If you purchase a journey logging system with a quality mark, the tax authorities will assume that your journey records are complete and accurate. PLEASE NOTE: to avoid the additional tax liability, the black-box journey log must show that no more than 500 kilometres have been driven for private purposes. For more information about the quality mark, click here.