Fleet News

Revenue backs down over 'triangular' travel expenses

FLEETS have won their battle with the Government over complicated changes to travel expenses which would have caused an administration nightmare. The Inland Revenue has backed down on the introduction of new regulations in April 1998 which govern taxation of travel expenses to temporary places of work - so-called triangular travel.

However, the policy change could cost the Government millions of pounds - the Inland Revenue has talked of 'tens of millions of pounds' although accountants say they don't know how much the measure will cost - and there are fears that in the Budget next March, Chancellor of the Exchequer Gordon Brown could look to recoup the 'lost' cash through higher than anticipated increases in fuel prices or a rise in company car tax.

Currently drivers are able to claim tax relief on travel expenses for the lesser of either the actual cost of the business journey or what the journey would have cost if they had travelled from their usual place of work. But the Inland Revenue had proposed that drivers could only claim relief for additional miles covered when travelling to a temporary workplace. That, said the fleet industry, employers, employees and accountants, would result in both employers and employees having to keep detailed records of every journey with expense policies and reimbursement forms having to be changed to comply with the new regulations.

Now , from April 6, 1998 when employees travel to a temporary place of work they will simply lodge a claim for the distance travelled with no calculations having to be made. That journey will also count towards the clocking up of 2,500 and 18,000 business miles.

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