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Fleet fuel and mileage cost management specialist, TMC, has issued advice to fleets hit by reporting issues at Allstar fuel cards.
The ongoing issue poses potential tax risks to drivers and employers, said TMC Managing Director, Paul Jackson.
In a worst-case scenario, thousands of drivers could become liable for private fuel benefit for the whole of the current tax year. This is because many employers rely on fuel card transaction data to calculate payroll deductions for fuel used privately.
Mr Jackson said:
"Employers risk getting into tax difficulties if they skip or delay making deductions for private fuel because of this crisis. The rules on private fuel benefit are unequivocal. Unless it is 100% clear that an employee has covered 100% of their private fuel costs for the year, the employee is liable for fuel benefit and the employer liable for Class 1A NIC of 13.8% of the benefit amount. HMRC are under no obligation to make allowances for your reimbursement process breaking down because your fuel card supplier wasn't able to invoice you.
"As soon as we became aware of this issue we sought advice on a solution for those of our customers who are affected by it. And because this situation has the potential to cause real problems for thousands of businesses, we decided to make the advice public."
TMC advice to Allstar users
Until actual cost information is once again available from Allstar, fleets needing to deduct private fuel costs from drivers should use the appropriate Advisory Fuel Rate pence-per-mile for each vehicle.
This will satisfy the conditions for full reimbursement of timely reimbursement of the private fuel cost, avoiding any liability for NICs. Any discrepancies between the AFRs and the actual costs can be settled with drivers when Allstar fuel reports become available again.
To avoid building up a backlog of deductions, TMC recommends that affected fleets make arrangements to collect outstanding private fuel payments from drivers, using the AFR rates, as soon as possible.
"Understandably, some companies are hanging on in the hope that their fuel card data will arrive soon," said Paul Jackson. "But any delay increases the risk of running into a tax issue down the line. And delaying will also lead to predictable problems when the time comes to deduct private mileage costs for several pay periods at once."
TMC advice line
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