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 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.