Fleet News

HMRC consultation calls flat rate mileage and fuel expenses into question

Person using fuel pump in filling station

Business travel data specialist TMC is urging companies to respond to a new HMRC consultation document that questions whether flat rate expenses such as Approved Mileage Allowance Payments (AMAPs) are still appropriate.

TMC, which captures and processes mileage and fuel expense data from over 100,000 UK and European drivers, says fleets should take this important opportunity to make their voice heard.

HMRC’s call for evidence about taxation of employee expenses is the latest stage of a four-year review programme by the Government. Also involving the Office of Tax Simplification, the programme aims to bring expenses and benefits taxation into line with 21st century working practices and technologies.

Paul Hollick, managing director of TMC, said: “At TMC we have experienced at first hand the challenging impact of removing flat rate travel subsistence payments last year. As far as we know, there are no plans to abolish AMAPs or the advisory fuel rates (AFRs). But HMRC are asking the question in this review, so we think it’s important for fleets to respond with their views.”

TMC’s view is that flat rate expense allowances are beneficial provided they are set at a realistic level. It points out that flat rates mean less paperwork for the driver, the employer and for HMRC as well, since realistic flat rates result in fewer claims for tax relief at year-end.

Hollick said he also hoped the consultation exercise will lead to a fresh review of the rules on subsistence claims.

“Until the last Finance Bill, they allowed drivers to use our mileage system to claim a set sum for meals based on time and distance away from home or the office,” he said. “Now the automatic option has been removed, so employers and drivers have to process receipts for every meal and sandwich they put through.

“The change, which was not sought by the Office of Tax Simplification, has been really challenging for UK businesses, especially blue collar workers. Restoring the ability to make a simple claim based on the time people spend travelling would be very useful.”

TMC said it will submit a formal response to the consultation in due course.

See next week’s Fleet News for more on the consultation.

Leave a comment for your chance to win £20 of John Lewis vouchers.

Every issue of Fleet News the editor picks his favourite comment from the past two weeks – get involved for your chance to appear in print and win!

Login to comment


No comments have been made yet.

Compare costs of your company cars

Looking to acquire new vehicles? Check how much they'll cost to run with our Car Running Cost calculator.

What is your BIK car tax liability?

The Fleet News car tax calculator lets you work out tax costs for both employer and employee