Automotive software specialist DCML has launched a new app, Dealer Car Manager BIK, in response to a recent crackdown by HM Revenue and Customs (HMRC) on businesses unable to provide an adequate paper trail of records.
The company believes the vast majority of car dealers would be unable to present, if asked, complete records of vehicle usage over the last 12 months.
This represents a widespread compliance risk across the UK’s dealer network, it said.
However, Dayinsure chairman Dennis Ryan has pointed out that the risk lies with the employee, not the employer.
"Since 6th April 2009 dealers have been unable to negotiate with HMRC with regard to Employee BIK because an ‘Averaging Scheme’ was introduced," he said.
The claim from DCML that businesses need to accurately account for what vehicles their employees have used is inaccurate, and only the employee must note what he/she has used.
The HMRC notice states: "The employee will be individually responsible for providing evidence of the cars actually made available to them each day, as their employer is not required to keep such records under these arrangements.”
However, businesses are expected to keep accurate records of business mileage, which has been a subject of HMRC checks since 2012.
Designed to help dealerships avoid potentially heavy penalties, the DCML BIK (benefit in kind) app is capable of calculating the tax implications for every employee according to their use of company vehicles, and can use GPS tracking for accurate mileage recording.
Nick Flaherty, DCML’s technical director, said: “Non-compliance on vehicle usage is absolutely rife and that is a big problem now that HMRC has got to grips with the issues.
DCML currently supports more than 800 franchised dealers with a suite of intelligent management solutions and also assists manufacturers with efficient online marketing tools.