The advisory rates are reviewed once per quarter by HMRC, taking into account the average mpg of vehicles in each category as well as the prices paid by consumers at the pumps.
AFR's have remained fairly stable during the previous 12 months but this quarter sees a reduction in all categories. While many of us welcome the cheaper fuel prices, company car drivers who claim back the cost of business fuel must now do so at lower rate.
There has been a furious response from many drivers who perceive the rate reduction to be a move that will leave them financially worse off. However, drivers should remember that they are actually better off at the point of sale. The reimbursement for business mileage may be smaller, but the original outlay was also less than in previous periods. So, you can still afford to buy a can of Red Bull and packet of Jelly Babies when you fill up.
Company car drivers who choose to pay the cost of their private mileage back to their employer, thus avoiding the costly fuel benefit tax, will now be paying less back to their bosses. Happy days!
For more information on company car tax or anything else, visit www.abax.co.uk