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New AFRs highlight benefits of fuel cards, says Arval

By / 7 years ago / Latest News / No Comments

There has been some disappointment expressed about the new AFR rates which came into force on 1 June, with some businesses complaining they still aren't high enough to fairly reimburse their drivers. In response, Arval says that this slight increase was not unexpected but is warning businesses not to leave their employees out of pocket.

Mike Waters, Director of Market Insight at Arval, explains: 'Although the AFR for an unleaded vehicle has increased by 1p per mile, diesel has remained the same, except for engines over 2000cc. Some businesses were hoping to see these increase much further to accurately reflect current fuel prices but the difficulty is that HMRC has to anticipate what will happen to oil prices in the next six months and we all know how volatile they can be. Over recent weeks the price of oil has actually been falling even if we aren't seeing this fully reflected at the pumps. If the rates are only reviewed twice a year then the AFR can't recompense employees exactly for the amount they spend on fuel.

'That's why they are called advisory rates, the HMRC does state that companies can reimburse drivers for business fuel above the AFR if they can prove the rates aren't high enough to adequately reimburse drivers. However, to do this the company must keep evidence of their vehicles' fuel consumption and fuel prices to prove that their payments are reasonable.

'The only way to guarantee that neither the employee or the employer loses out is to provide employees with a fuel card.  This benefits the employee because they won't have to use their own money to purchase and reclaim fuel and the company can be sure that it is reimbursing the employee the exact cost of fuel they buy.

'This also means that the company can see exactly how much fuel each driver is using, how much it cost and where they bought it, enabling them to take much more control of their fuel costs and deliver the employee a valued benefit at the same time.'

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