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Flat rate mileage and fuel expenses under focus in HMRC consultation

Fleets are being urged to have their say a new HMRC consultation document that questions whether flat rate expenses such as Approved Mileage Allowance Payments (AMAPs) are still appropriate.


HMRC’s call for evidence is part of a four-year review programme by the Government.

The consultation, which is open until 11:45pm on 12 June 2017, follows the Spring Budget, where the Government confirmed the Autumn Statement announcement that a call for evidence would be published to better understand the use of the income tax relief for employees’ business expenses, including those that are not reimbursed by their employer.

The main objectives of the call for evidence are to understand:
·      If the current rules or their administration can be clearer and simpler
·      Whether the tax rules for expenses are fit for purpose in the modern economy
·      Why the cost to the exchequer of the tax relief for expenses which are not reimbursed has increased

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.

Business travel data specialist TMC is urging companies to respond to the document, outlining its own view that provided flat rate expense allowances are set at a realistic level, they can be beneficial for fleets, including through 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.

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.”

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Natalie Middleton

Natalie has worked as a fleet journalist for 14 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day. Natalie works across the magazine portfolio and updates the company websites with daily news, interviews and road test content.