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BUDGET 2011: AFR rates should increase, says BVRLA

Date: 23 March 2011

The government should increase advisory fuel rates following on from today's Budget which announced a rise in AMAP rates, according to BVRLA chief executive John Lewis.

"The increase in AMAP to 45p is a back-door pay increase for public-sector and other grey-fleet users that will appease unions worried about job cuts and salary freezes.

He continued: "If the price of fuel has had such an impact on vehicle running costs, why are we not seeing a bigger rise in AFRs? The government shows how it works out the AFR rate, we now urge it to do the same for AMAP."

However, Lewis commended the Chancellor's decision to abandon April's 1p increase in fuel duty and delay of the inflation increase until next year.

"His fair fuel stabiliser is ingenious, shifting the burden of taxation upstream when crude oil prices increase.

"Whether you are a haulier, a fleet manager, a commuter or a just someone trying to keep your family car on the road, this imaginative tax measure will have an instant impact on your weekly cash flow. For many it will be more important than all the other tax announcements put together."

However, there is nothing 'fair' about the government's decision to maintain the 3% diesel surcharge within the company car tax regime, said the BVRLA. "This discriminatory tax against diesel fuel is totally out-of-date and needs to be abolished.

"We would go even further and call for the government to investigate the continuing differential between diesel and petrol prices at the pumps which is nothing more than exploitation of business motorists and haulage companies."

Regarding company car tax, Lewis said: "The CO2 bandings for company car and benefit-in-kind tax are seeing a natural downward progression that will maintain the incentive for companies to green their fleets.

He concluded: "However, we would hope to see a return to the three-year view on these, which is essential for restoring certainty and predictability to organisations' fleet decisions."

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