Companies have been calling on the Government to review the advisory fuel rates they use to reimburse staff for business mileage in company cars amid concerns that soaring prices at the pump are leaving company car drivers heavily out of pocket.
HMRC reviewed its rates on July 1, 2005, when the rates for both diesel and petrol cars over 2,000cc were increased.
Drivers in smaller-engined cars were not given an increase and, since the change, fuel prices have continued to rocket.
At a recent Fleet News Round Table, a gathering of fleet managers discussing industry issues, fleets heard that there may be a short-term solution to the problem.
Richard Rose, operations manager at Astra Zeneca, who runs a 2,700-car fleet, said: ‘We contacted HMRC and said that for an interim period, we would have to increase the rate at which we paid drivers, but that we would bring those rates back when fuel costs come down.
‘At the moment we are on a higher level of repayment than normal. It is a reasonable hike and we have agreement to do that for the next four to five weeks, when it will be reviewed again.’
This side-stepped the problem that although the Inland Revenue regularly reviews the rates, it can take months for a change to be put in place and all the time drivers are losing out.
Rose added: ‘We felt we needed to react to complaints from drivers so we brought in higher interim rates for fuel reimbursement. We just went to HMRC and explained the situation and they agreed to putting in the rates for a short time.’
Fleets attending the round table, which was held in association with National Car Rental, said the biggest problem was for drivers using vehicles on short town-based trips, because fuel economy drops in stop-start traffic.
Liz Hollands, fleet manager for DTZ Debenham Tie Leung, who runs 400 cars, said: ‘We pay company car drivers the approved rates and when you have people who chose a low CO2 car, who are getting 9 pence per mile, telling you it is costing them 10.5ppm, it is a problem.
Generally, it is people earning at the lower end who find it a real problem.’
Caroline Sandall, fleet manager for Barclays, who has 4,200 cars, said: ‘The people that have complained most are people doing short town- based trips where they can’t achieve the fuel economy HMRC used to set the rates.’