ACFO directors have met with the HMRC Policy Advisor to discuss the current concerns over the levels of the advisory fuel rates (AFR) reimbursement schedule. Many members will be only too aware that the AFR rates released in December 2010 did not address the actual fuel costs for company cars - and that was before the duty and VAT increases were applied. Also since their launch, the forecourt cost of road fuels has increased further due to the underlying price of crude oil.
The meeting at HM Treasury was positive and HMRC listened carefully to the ACFO points of concern - mainly the levels of fuel costs within the formula used; the average consumption levels used per band, and the frequency of any reviews to reflect the dynamic market for fuel costs.
ACFO Chairman Julie Jenner, John Pryor and Stewart Whyte relayed the level of concern across the membership that many drivers now find they are effectively subsidising their employers for every business mile covered. They reinforced their understanding that the system is not intended to reward careless or extravagant driving in thirsty cars - but equally is not designed to penalise at-work drivers by forcing an under-recovery of actual costs for business travel.
ACFO was invited to submit various elements of evidence, based on collective experience across the membership and from their technical knowledge of "actual running costs". Your Board will be assembling these points and submitting them in early course, so that they can be considered in any review of the AFR system.
The meeting was timely as there is to be an internal HMRC consideration of these and similar areas in preparation for the national Budget (due Wednesday 23rd March). ACFO will also be making its own pre-Budget submission on the many taxation aspects of fleet operation.