Alongside a company car and a health plan, a fuel card has often been seen as a desirable perk; something staff aspire to and something businesses use as a shiny, plastic carrot to persuade staff to join them.

The reason fuel cards have become more desirable is because the types of firms using them have changed considerably – many new, small and medium as well as diverse businesses are now discovering their benefits.

While once exclusively in the domain of haulage and courier firms, fuel cards now appeal to a much broader audience, such as small and medium smart businesses seeing the potential benefits for both themselves and their staff.

So if you’ve ever thought about utilising fuel cards, or already do, and want to know whether there is a better option out there, read on; we’ve looked at the state-of-play in the industry and how fuel card use is evolving and could be good for your company.

Fuel cards for business and employees
Graph showing percent of employees who use company fuel

Fuel benefit tax: moving away from private use of company fuel benefit

If employees use a fuel card to cover all or part of any private travel, including journeys to and from work, then they are in effect using company funds to pay for their personal expenses. This makes it a taxable benefit on which the employee is taxed. This also requires a National Insurance contribution on that benefit from the employer. Some staff still see it as a benefit if they do a lot of travelling away from work, but for many others the sums don’t work.

That’s why fuel cards are becoming an increasingly popular way of simplifying the whole process, letting staff purchase work-related fuel with the company fuel card and then pay back any private use to employers.

The advantages of offering fuel cards as a benefit for employers

It may seem obvious but the main reason businesses choose fuel cards is to save money on their fuel costs. Any business that runs a fleet, big or small, can find a fuel card tailored to their specific business needs. How these savings are made depends on certain criteria.

Some fuel cards only provide savings if they are used on a specific fuel network (certain fuel stations), while others can be used across an extensive national network of fuel stations. It’s important therefore, that when choosing, you think about which stations are local to your business, as the card will be less desirable to staff if they have to go out of their way to fill up and use up more fuel to do so.

However, if you have staff who travel the length and breadth of the country to work it’s a genuine advantage knowing you’ve provided them with the ability to refuel with a widely accepted fuel card without the need for petty cash.

Less paperwork

As well as fewer receipts, some fuel cards provide companies with one HMRC-compliant invoice, which can considerably reduce admin. They also let you closely monitor where fuel is purchased from, how much your drivers are spending and when they’re topping up. This information can help you stay one step ahead, allowing you to have more control over the efficiencyof your fleet or drivers on the road.

Fuel cards no longer start and end at fuel

Like any form of technology, fuel cards are constantly evolving to meet the needs of modern business. Some cards now provide the ability to pay for road tolls and other services while other cards, allow your staff to pay for business expenses that you can define.

The disadvantages of offering fuel cards as a benefit for employers

Some fuel card companies charge a cost-per-card or an annual fee per card issued. These fees are usually more than offset by the fuel savings you can make, but when you’re researching your options it makes sense to be aware of any potential fees before you sign up.

Also, look at fuel cards from your employees’ perspective. What benefits will they enjoy and which things do you need to think about that may make a fuel card desirable for them?

The advantages of providing fuel cards as a benefit for employees

Naturally the biggest one is the fact their fuel admin is dealt with. There’s no need for them to keep receipts as all their fuel card usage is automatically recorded and then sent directly to your admin department.

With some crads employees who clock up high private mileage can also benefit knowing they pay a reduced set cost per for their fuel. So they can drive without worry which provides them with freedom and enhances the sense the card is a ‘benefit’.

Using a fuel card can also be very convenient. If your fuel card comes with Chip technology and pay at pump is available, staff don’t even have to walk inside to pay, saving them time and effort.

These all add up to make life easier for your team. A fuel card is a pro-active and simple way to show staff they are valued.

The disadvantages of providing fuel cards as a benefit for employees

Some fuel cards only provide savings at the pump (at the fuel station) and only if the driver uses fuel stations on a particular fuel network (certain fuel stations). This can mean that drivers have to travel out of their way to find somewhere where their card is welcome, which can be counter-productive and end up with route diversion and lost time.

The use of a fuel crad for private mileage (including travelling to and from work) is also a taxable benefit that an employee will be taxed on.

It’s really important that you can respond to the changing needs and aspirations of both your staff and your business. Fuel may not be a deal-breaker in contract negotiations but demonstrating you have explored options and can offer fuel solutions that work for your staff is a positive thing.

More and more businesses are finding fuel cards a better solution. With so many available it’s never been easier to find a card that delivers the specific benefits you’re looking for.

Why compare fuel cards?

  • Get the best value

    By comparing business fuel cards you can find the one that offers the best value for your requirements.

  • Fuel cards offer different benefits

    Some fuel cards offer HMRC-compliant invoices meaning no need to keep receipts, some offer discounts on vehicle servicing and repairs whilst others are more widely accepted so it’s important you find the one that’s right for you.

  • Weigh up your options

    The best way to find the right card for your business is to compare the specific benefits and then you can choose the right business fuel card for you.