ACFO concern over cuts to Advisory Fuel Rates

The Premier Organisation for Fleet Operators (ACFO) has expressed concern about cuts in the Advisory Fuel Rates (AFR) and is holding meetings with HM Revenue & Customs (HMRC) to discuss its changes.

It has warned that company car drivers reimbursed by their employer for business mileage could be out of pocket following changes by the HMRC to AFR.

The rates allow employers to reimburse drivers who have to pay up front for their own fuel for business miles on a tax free basis.

Although HMRC considers that the reviewed rates are in line with reduced fuel prices, ACFO is convinced that the downsize is far too great, and does not reflect fuel’s cost in the UK.

A spokesman for ACFO explained: "A 2p per mile change is a major percentage change, and many drivers are complaining.

"For example, if fuel price has gone down by 10%, the mileage rate has gone down by 20%, so it’s not in line."

The rate for a 1.4 litre petrol vehicle will drop from 11p to 9p from 1 February 2007, while the rate for a 1.4 litre to 2 litre petrol engine will reduce from 13p to 11p. There are further reductions for diesel and LPG vehicles.