ACFO calls for AFR rise
16 April 2010
ACFO is calling for a rise in advisory fuel rates as petrol prices hit a record high. The organisation said it has been inundated with calls from members concerned at increasing disparity between AFRs and forecourt prices. Despite rising costs, HMRC does not plan to change rates ahead of the half-year review, said ACFO.
The current AFRs were last revised in December 2009 when a litre of unleaded petrol cost 108.7p and a litre of diesel 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.
Currently, HMRC reviews rates twice a year with any changes taking effect on 1 June 1 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, there are no plans to change rates.
ACFO director and membership secretary Stewart Whyte said: "It is clear from the number of ACFO fleet decision-maker members calling our office that there is widespread concern over the low level of AFRs in relation to the high price of fuel, particularly petrol as pump prices are now at levels not seen before in the UK.
"That concern is manifesting itself with some drivers reluctant to undertake business travel on the basis that they are effectively having to subsidise their employer for every mile covered, even driving economically.
"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."