Fleet concern over revised fuel tax rates

TAX officials have agreed to meet representatives of the UK fleet industry to discuss new advisory fuel rates that have been criticised for leaving drivers out of pocket.

The new rates were announced by Her Majesty’s Revenue & Customs (HMRC) last week and fleet operators’ association ACFO called for clarification on how some of the new figures were derived.

The rates apply to claims from employees for reimbursement of costs of fuel for business journeys and also for clawing back private mileage costs from employees where all fuel is initially paid for by the employer, for example on a fuel card.

The rate system is intended to reduce administration by providing a set of advisory fuel reimbursement rates that are deemed tax-free.

Fleet News contacted HMRC officials and a spokesman said they were willing to meet industry representatives to discuss the rate changes.

He said: ‘HMRC has noted the concerns raised and will be meeting representatives from ACFO to discuss further.’

ACFO has been contacted by a number of members who complain that the new schedule will leave many of their drivers ‘seriously out of pocket’ in terms of fuel for business mileage.

A spokesman said: ‘This is likely to cause concern – and significant HR and payroll administration – among employers who use the HMRC advisory rates.

‘There is also a long-term concern by fleet managers that many individual tax offices ignore the ‘advisory’ nature of the schedule and apply it rigidly, irrespective of the flexibility that HMRC claims to be implicit in the structure of the arrangements.’

ACFO is concerned about the underlying fuel consumption figures used by HMRC, which it says assume an overall improvement of almost 2% in delivered fuel consumption performance and that all rates on the schedule have been reduced by either 1p or 2p per mile.

It adds that in some cases this amounts to a near 20% cut, although only petrol prices have dropped by more than 10%, the level declared by HMRC at which any rate change could be introduced.

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New rates