HMRC advisory fuel rates
Discussion
I have a company car and a fuel card. Any private miles are deducted from my salary at the end of the month at a set pence per mile.
I've discovered that I'm being charged 1p more per mile than the HMRC rates. You might say its just an extra penny per mile, but it soon adds up.
I asked payroll why this was, and they said that HMRC rates are only advisory and it's down to individual business to set their own rates? Is this the case?
On HMRC's website it says:
"Employers who require employees to repay the cost of fuel used for private travel.
Providing that all of the miles of private travel have been properly identified, HMRC will accept that there is no fuel benefit charge, and therefore no Class 1A NICs liability, where the employer uses the appropriate rate from the current table (or any higher rate) to work out the cost of fuel used for private travel that the employee must repay to the employer. Again, this reflects the fact that they are intended to reflect actual average fuel costs.
Even if it seems that the actual cost of the fuel could be more than the current advisory fuel rate, it is only in exceptional cases that we will consider arguing that a higher repayment rate should apply. For example, where the employee drives a very large-engined company car that achieves fewer than 16 or 17 miles to the gallon. But we will always accept that the guideline rates can be used to calculate the amount that the employee must make good where the engine size is 3 litres or less.
The advisory rates will not be binding where an employer can demonstrate that employees cover the full cost of private fuel by repaying at a lower rate per mile."
Ironically, when HMRC raised the fuel rate by a penny last year, this increase was immediately passed on to me. HMRC have later reduced the fuel rate by a penny but this wasn't passed on to me by my employer?
Any thoughts/advice welcome!
I've discovered that I'm being charged 1p more per mile than the HMRC rates. You might say its just an extra penny per mile, but it soon adds up.
I asked payroll why this was, and they said that HMRC rates are only advisory and it's down to individual business to set their own rates? Is this the case?
On HMRC's website it says:
"Employers who require employees to repay the cost of fuel used for private travel.
Providing that all of the miles of private travel have been properly identified, HMRC will accept that there is no fuel benefit charge, and therefore no Class 1A NICs liability, where the employer uses the appropriate rate from the current table (or any higher rate) to work out the cost of fuel used for private travel that the employee must repay to the employer. Again, this reflects the fact that they are intended to reflect actual average fuel costs.
Even if it seems that the actual cost of the fuel could be more than the current advisory fuel rate, it is only in exceptional cases that we will consider arguing that a higher repayment rate should apply. For example, where the employee drives a very large-engined company car that achieves fewer than 16 or 17 miles to the gallon. But we will always accept that the guideline rates can be used to calculate the amount that the employee must make good where the engine size is 3 litres or less.
The advisory rates will not be binding where an employer can demonstrate that employees cover the full cost of private fuel by repaying at a lower rate per mile."
Ironically, when HMRC raised the fuel rate by a penny last year, this increase was immediately passed on to me. HMRC have later reduced the fuel rate by a penny but this wasn't passed on to me by my employer?
Any thoughts/advice welcome!
Eric Mc said:
"Advisory" does not mean "Compulsory".
As I suspected!So this bit "Even if it seems that the actual cost of the fuel could be more than the current advisory fuel rate, it is only in exceptional cases that we will consider arguing that a higher repayment rate should apply" means nothing then?
Gassing Station | Jobs & Employment Matters | Top of Page | What's New | My Stuff