The CIPP welcomes some very much needed changes to the calculation and assessment of Advisory Fuel Rates (AFRs) by HMRC. For some time members have been advising the policy team that the rates and more so the timings of assessment are not recompensing employees quick enough for their costs in fuel. Therefore members will be pleased with the following announcement received by the CIPP via the HMRC, Expenses & Benefits consultation forum Chair: In advance of the next revision of AFRs due next week, HMRC will be bringing in some changes to the way that HMRC calculates the figures and to the frequency of review. HMRC will review AFRs on a quarterly basis, starting from 1st June 2011, but as a result of this increased frequency, they will withdraw their commitment to make interim changes if fuel prices vary by 5% or more; · HMRC will reduce the average miles per gallon for petrol and diesel by 15% rather than 10% in alignment with the approach used by the Energy Saving Trust – this is to reflect the fact that figure on fuel efficiency produced by car manufacturers are based on optimum driving conditions and that HMRC need to factor in a reduction for real life driving conditions; · HMRC will introduce an extra band for diesel cars, now that more manufacturers are producing cars with smaller diesel engines. The first band will now be set up to and including 1600cc, the second band will be 1601-2000cc and the third band will be 2001cc and above. HMRC will continue reviewing this, and if the range of smaller engines increases, they will look eventually to set the lowest band up to and including 1400cc, so that the three bands for petrol, diesel and LPG are the same. HMRC has also confirmed that they will continue to give employers a month’s grace to implement the changes.
HMRC PUBLISHES REVISED ADVISORY FUEL RATES
1 June 2011 HMRC has published the latest Advisory Fuel Rates . As we mentioned last week, there have been welcome changes to the way these rates are calculated, including reviewing the rates on a quarterly rather than annual basis, and an extra band for diesel cars now that manufacturers are producing cars with smaller diesel engines.
ADVISORY FUEL RATES – 1 SEPTEMBER 2011
31 August 2011 HMRC has published advisory fuel rates to operate from 1 September 2011.
These rates apply to all journeys on or after 1 September 2011 until further notice. For one month from the date of change, employers may use either the previous or new current rates, as they choose. Employers may therefore make or require supplementary payments if they so wish, but are under no obligation to do either.
Engine size
Petrol
LPG
1400cc or less
15p 18p 26p
11p 12p 18p
1401cc to 2000cc
Over 2000cc
CIPP Policy News Journal
09/10/2012, Page 71 of 234
Made with FlippingBook - Online magazine maker