Fleet News

ACFO seeks 2011 talks with the Government

The establishing of a close working relationship with the coalition Government is the New Year goal of ACFO with a number of political issues on its agenda to be discussed with ministers.

Following the May general election and the coalition’s emergency Budget in June, which focused on austerity measures and the financial crisis, and the Government’s decision to axe the traditional December Pre-Budget Report, direct talks with ministers remains a key aspiration for ACFO.

While the organisation’s leaders continue to discuss issues with civil servants, Chairman Julie Jenner is hoping that in the run-up to the 2011 Budget on Wednesday, March 23, ACFO will hold face-to-face discussions with ministers on a number of key issues. They include:

  • Advisory Fuel Rates - the business mileage reimbursement rates paid to company car drivers.
  • Company car tax rates for 2013/14 and beyond.
  • Guidance on long-term plans for all motoring tax rates

New Advisory Fuel Rates came into effect on December 1 this year. However, with pump prices at the time close to record levels and a VAT rise to 20% due on January 4, 2011, the majority of rates only increased by 1p a mile, some remained unchanged while the rate for diesel cars over 2.0-litres was cut by 1p. Yet, according to the AA, petrol is close to 12p a litre more expensive than 12 months ago and diesel 14p a litre more expensive.

Jenner said: “Where is the justification for the new rates? There was a fuel duty rise in October and another one is due in January. We find it difficult to understand how rates can only rise by 1p a mile let alone stand still or fall in other cases.

“We want to question the formula used to calculate the rates directly with ministers. The new rates, which are due to be in place for six months, will undoubtedly leave drivers out of pocket.”

Company car benefit-in-kind tax rates are known for the next two financial years - 2011/12 and 2012/13 - but employees now taking delivery of new vehicles remain in the dark as to how much their tax bill will be from April 6, 2013.

Jenner said: “Historically, the Government has always announced company car tax benefit-in-kind rates on a three-year cycle so drivers know where they stand. However, that routine has broken down. It is a concern that employees are taking delivery of new cars now and have no idea of how much tax they will be paying on a vehicle they will still be driving in 2013/14.

“In the last decade, Government has given businesses and drivers reasonable notice of company car tax changes. We want to underline the importance of that to ministers so corporate decision-making can be made in full knowledge of all the tax facts.”

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