Soaring fuel prices are leaving drivers out of pocket with new Advisory Fuel Rates (AFRs) effective from the start of March unable to cover actual costs.
The current set of AFRs is largely unchanged from last year, where record fuel prices had seen widespread increases in the rates used by fleet drivers and employers.
However, record prices on the forecourt – and spiralling electricity prices impacting drivers of electric vehicles – mean these AFRs are not covering the reimbursement required to keep drivers from losing out.
Should prices continue to rise, HMRC – which sets the rates – could take the step of changing AFRs, but this would be a highly unusual step considering the recent review and publication of the current system.
Instead, independent fleet consultant Jon Burdekin thinks employees can make sure drivers are not left out of pocket. He says: “In such a volatile space for prices – whether fuel or energy prices – the emphasis is on the word ‘advisory’. The Advisory Fuel Rates are not mandatory; fleets ought to look at alternatives that are accurate.
“There are mileage software solutions that can consolidate fuel spend into easy payments, so that both employee and employer know exactly what is spent. By unlocking accurate spend and reimbursing that rate, fleets and drivers are not losing out, and it is able to be backed up with evidence when filing accounts with HMRC.”
Burdekin added that the same held true whether it was for AFRs or AERs (Advisory Electricity Rate).
If your fleet needs assistance with fuel management, then please call our leasing experts on 01283 351200.
