Advisory fuel rates
HMRC has announced that they no longer intend to provide any notice of changes to the advisory fuel rates (AFRs) .
The AFRs are used as a guide as to what employers can reimburse employees tax-free for fuel they purchase for use on business journeys in a company vehicle. The AFRs can also be paid where an employee receives free fuel and needs to reimburse the company for all private fuel used.
HMRC normally revises the AFRs every six months to take effect from 1 January and 1 July each year. In the past the new rates have been announced about a month in advance to allow employers time to adjust their expense claim forms or software.
HMRC has said that employers making or collecting payments at the superseded rate because they have not been able to change their systems in time should make or require a second payment in respect of the same period in order to apply the new rate from its effective date.
This will create extra work for employers as they will have to deal twice with every fuel claim based on the old AFRs around the changeover date. Representations are being made to HMRC to revise their decision and/or their guidance on this matter.