Fleet News

New headache for fleets as travel rules change

FLEET bosses will face an administrative headache and company car drivers look set to lose cash when new legislation governing tax relief on travel expenses comes into force in April, 1998. The Inland Revenue claims the new rules, which cover taxation of travel expenses to temporary places of work, make the system fairer.

However, chartered accountancy firm Ernst & Young says the new system will mean a further administrative burden on employers and employees already faced with Self Assessment, which came into force last month (April). 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. From next year drivers can only claim relief for additional miles covered when travelling to a temporary workplace.

Peter Minchinton, manager of Ernst & Young's Automotive Group, said: 'Employers and employees will be faced with an enormous and detailed record-keeping task. Expense policies and claims forms will need to be revised to comply and to ensure valuable expenses dispensations are not compromised.'

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