ACFO takes up AFR issue with HMRC
That's the view of fleet organisation ACFO, which believes the rates should be raised to reflect the record levels at the pump.
The organisation says that in some cases company car drivers are now reluctant to undertake business travel.
According to ACFO, it has been 'inundated' with calls from members concerned at the increasing disparity between the HM Revenue & Customs (HMRC) schedule of advisory fuel rates and the current forecourt prices of the mainstream fuels.
The current AFRs were last revised in December 2009 when a litre of unleaded petrol cost 108.7p and a litre of diesel cost 109.9p. Today a litre of unleaded petrol has rocketed to an all-time high of 120.3p a litre on average, with a litre of diesel costing an average 121.1p, according to comparison website www.petrolprices.com.
Currently HMRC reviews rates twice a year, with any changes taking effect on 1 June and 1 December. However, HMRC also says it will consider changing the rates if fuel prices fluctuate by 5% from the published rates when each review is made and it considers the price change will be sustained.
However, despite a litre of petrol now being 11.6p (10.7%) more expensive than when AFRs were reviewed last year and a litre of diesel being 11.2p (10.2%) more expensive – significantly above the 5% figures – ACFO says it has been told that HMRC has no plans to change rates ahead of the scheduled half-year review.
Despite this ACFO says it will keep on lobbying for a rise in rates.
ACFO director and membership secretary Stewart Whyte said: 'On behalf of ACFO members we will continue to press for a more responsive position on fuel reimbursement systems. We recognise the benefits of infrequent rate changes from the administrative point of view, but this has to be balanced against fairness and good practice for employee treatment.'