The Government is set to abandon the one-month advanced notice it gives fleets about changes to the Advisory Fuel Rates (AFR), which are currently reviewed and published every six months.

HMRC confirmed that it is currently reviewing how the contentious rates are set following concerns that they do not reflect the true cost of business motoring.

The rates are used to calculate the amount company drivers who pay for business-use fuel can claim back from their employers.

But because of the month’s notice that HMRC agreed to give fleets following the last AFR review in 2007, there is a significant delay between when the rates are set and when they actually come into force during which time the cost of fuel could have risen considerably.

Now, HMRC has told Fleet News that it is likely that it will scrap the one-month notice period in an attempt to ensure AFR more accurately reflect the actual cost of fuel.

“The only option we are considering at the moment concerns our commitment to publish the January 1 and July 1 changes a month in advance,” an HMRC spokesman said.

“If we reduce this notice period we could base the rates on fuel prices nearer the date of the effective dates and the change in rates would then align more closely to actual fuel prices at the beginning of the period.”

ACFO has given a guarded welcome to the news.

"ACFO recognises the potential issues for HMRC in collating information and announcing any changes to current rates one month in advance,” said chairman Julie Jenner.

“If by removing the one month advance notification period, the rates are a more accurate and timely reflection of fuel prices then we would not oppose this revised process.”

The next review is due in November with the new rates being published on December 1 before coming into force on January 1, 2010.

However, it is now expected that the rates will be set in mid-December and still come into force on January 1.