HMRC consultation seeks views on flat rate mileage and fuel expenses

Following Spring Budget 2017, HM Revenue & Customs (HMRC) has launched a new consultation into the taxation of employee expenses.

The consultation is the latest stage of a four-year Government review programme, carried out in collaboration with the Office of Tax Simplification and geared at bringing benefits and expenses taxation into line with modern working practices.

Laid out as a ‘call for evidence’, its primary purpose is to seek views on whether flat rate expenses such as Approved Mileage Allowance Payments (AMAPs) are still appropriate in today’s working world.

HMRC is seeking evidence in the following areas:

  • Current employer practices on employee expenses.
  • Current tax rules on employee expenses.
  • The future of employee expenses.

Travel data analysts and fleet industry bodies are calling upon small and medium-sized enterprises (SMEs) and fleet operators to respond to the call for evidence, which comes shortly after flat rate travel and subsistence payments were abolished last year.

Reports suggest that HMRC has no explicit plans to abolish AMAPs or the current advisory fuel rates (AFRs). However, the Revenue’s review does bring into question whether such rules are ‘fit for purpose’ in the modern economy.

The consultation, entitled Taxation of employee expenses call for evidence, can be accessed here and will run until 11:45pm on 12 June 2017.