TaxCorporate TaxEmployers’ ‘relief’ at new fuel tax rates

Employers' 'relief' at new fuel tax rates

HMRC updates tax rates for fuel expenses

The tax-man is updating fuel expenses rates to reflect the rise in the price
of fuel.

The increase in the Advisory Fuel Reimbursement (AFR) rate should ease the
pressure on employers who have faced tough decisions justifying the rate at
which they reimburse employees for their fuel costs.

However KPMG has questioned HMRC’s decision to only revise the rate twice a
year.

‘HMRC’s policy is to update the rates twice yearly – although they say that
they will review if rates move by more than 5% in the interim. Despite
significant increases in fuel prices, employers will argue that HMRC were slow
to make any changes this time,’ said Harvey Perkins, director in KPMG people
services.

‘Logic might suggest that the system needs to be more flexible to the needs
of business in the UK – after all its stated function is to ensure that
employees are allowed to be reimbursed fairly for the true cost of the business
fuel they actually use.’

‘The recent fuel price increases which justify these AFR changes have
happened very rapidly. In these unusual circumstances we are mindful that an
implementation date of 1 July might mean that drivers will be incurring higher
fuel prices before the new rates become effective. Consequently, where employers
are able to do so, HMRC is content for the new rates to be implemented
immediately i.e. from 1 June,’ according to
HMRC’s
website
.

Further reading:

Green company cars could save UK
firms £3bn a year

Related Articles

Watch out when winding up

Corporate Tax Watch out when winding up

2w Emma Rawson, ATT Technical Officer
How might Brexit affect UK tax policy?

Brexit & Economy How might Brexit affect UK tax policy?

2w Santhie Goundar
Corporation tax losses – your newly flexible friends

Corporate Tax Corporation tax losses – your newly flexible friends

3m Emma Rawson, ATT Technical Officer
HMRC large business tax enquiry duration rises to 3 years

Corporate Tax HMRC large business tax enquiry duration rises to 3 years

3m Emma Smith, Managing Editor
SMEs paying higher rate of corporation tax than big businesses

Corporate Tax SMEs paying higher rate of corporation tax than big businesses

4m Alia Shoaib, Reporter
Big names, little tax: Airbnb, Facebook, Kellogg’s, eBay

Corporate Tax Big names, little tax: Airbnb, Facebook, Kellogg’s, eBay

7m Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

Administration New trading allowance: simplicity, but not as we know it

7m Emma Rawson, ATT Technical Officer
EU divided over radical tax reforms targeting tech giants

Corporate Tax EU divided over radical tax reforms targeting tech giants

7m Alia Shoaib, Reporter