ACFO is confident the Government will reveal new company car tax rates in the budget after meeting Her Majesty’s Revenue and Customs (HMRC).
The Government has always announced company car tax benefit-in-kind (BiK) rates on a three-year cycle so drivers know where they stand.
However, while fleets are aware of BiK rates for the next two financial years they have not been informed what will happen from 2013 onwards.
That means employees are effectively taking delivery of new vehicles now while not knowing how much their tax bill will be from April, 2013.
“We stressed to HMRC how vitally important it is that corporate decision-making is made in full knowledge of all the tax facts and we’re now reasonably confident that we will see something in the forthcoming budget,” said ACFO chairman Julie Jenner, who met the HMRC policy advisor with ACFO directors John Pryor and Stewart Whyte.
Describing the meeting as positive, Jenner said she also stressed the need for an urgent review of Advisory Fuel Rates (AFRs).
“As it stands, no formal review is planned until June and that really concerns us, especially while the cost of fuel seems to be rising on a daily basis,” she explained.
ACFO repeated its request for a quarterly review instead of the current twice yearly assessment as this would address any miss-matches much more quickly.
“However, we’ve also urged HMRC to look at how they categorise the rates,” added Jenner. “We’ve suggested that diesel be split into three different rates according to engine size as it is with petrol.”