TAX LATEST: HMRC issues new advisory fuel rates (June 2008)

Date: 30 May 2008   |   Author: Tristan Young

Cars running on modern petrol have a lower list price than diesel equivalents

AFRs cover fuel-only payments for company car drivers on work business.

The rates have risen by up to three pence per mile. Only small engined LPG vehicles see no change in AFR.

HMRC has also announced that the rates will not be subject to the normal one month notice period before coming in.

An HMRC spokesman said: "We are aware that there is some concern in the fleet industry about the level of AFRs and the level of increases are significant, so although HMRC would normally expect to give a month's notice (and will do so for future revisions) on this occasion we will respond to unusual circumstances and agree for employers to apply the new rates during June if they are able and willing to do so. This line will be reflected on the website and in guidance given to staff."

ACFO director Stewart Whyte said: "We welcome these changes in advisory fuel rates. We also appreciate that HMRC has acknowledged the extreme financial pressure on many company car drivers who believe that in recent months they have effectively been subsidising their companies' business mileage.

"Assuming that employers are able to apply the new rates during June, one month earlier than expected, and are willing to do so, the HMRC's concession will go some considerable way towards alleviating the financial hardship that drivers have been feeling. There is still some encouragement in these new rates for employees to drive as economically as possible, but at least the element of subsidising employers has gone."

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