How do fuel cards work for employees?

11 January 2022
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Whether you’re a small business or a large international company, deciding to move to fuel cards for your employees may seem like a big step. But the truth is very few businesses look back after making this change. Our fuel cards can provide both companies and their employees significant benefits.

In this article, we will answer some common questions about how fuel cards work for employees and why a fuel card is so beneficial for businesses.

Can I give a fuel card to any employee?

Absolutely. If an employee uses a company vehicle or their own private vehicle for business use, then you can give them a fuel card to use.

Are there any risks to giving an employee a fuel card?

The great thing about fuel cards is that they can reduce several important risks, rather than create additional worries.

Firstly, fuel fraud is harder to commit because your company is charged directly for the fuel bought on a card. Also, if your company decides to provide fuel cards to your employees, you’ll be able to track every transaction they make through an online management system. This makes checking for any unusual activity very straightforward.

Secondly, fuel cards have the added protection of either being chip and PIN, swipe and PIN or swipe and signature. This means if a card was stolen, it would be extremely hard to use fraudulently.

However, it is important to be aware that if employees use their fuel cards for personal travel then the company would have to pay tax charges.

Will an employee reduce their fuel costs?

If you decide to provide an employee with a fixed weekly price fuel card, every litre of fuel they buy on that card will be charged at a competitive fixed price throughout the week. The fixed price of these fuel cards is closely linked to the wholesale fuel market, allowing you to reduce fuel costs.

Alternatively, if you assign an employee a pump price fuel card, they’ll pay the price at the pump. This makes the buying of fuel transparent for your employees because they’ll know exactly what they are paying every time they visit a service station.

Both the fixed price fuel card and the pump price fuel card offer different benefits that vary depending on the needs of your business. Before choosing one of our cards, it’s important to consider your employee’s fuel usage, their normal travel routes, and the availability of fuel stations. You can contact our expert team for more information about any of our fuel cards or for help determining which fuel card is best for your business.

How else will fuel cards for my employees save my business money?

Not only can fuel cards reduce your fuel costs but at Right Fuel Card we have no interest charges or non-usage fees. So, if your employees are currently using company credit cards to pay for fuel and your business is incurring interest charges, imagine how much you could save per year.

In addition, fuel cards are proven to reduce admin costs because invoices and VAT are much easier to manage. This will save you money which can then be invested elsewhere.

Will there be any minimum spends involved for an employee or my business?

Not at all. There are no joining or interest fees to pay, and you also don’t have to spend a minimum amount each month.

How else will an employee benefit from using a fuel card?

Fuel cards can offer employees a whole range of benefits. These include:

  • No upfront costs– fuel cards eliminate the need for employees to spend their own money on fuel expenses and then claim it back. Instead, your company is charged directly, which means employees are never out of pocket.
  • Hassle-free payments – employees that have previously been using a credit card to pay for fuel can say goodbye to carrying cash or looking after receipts. With a fuel card, the price of fuel will automatically be added to your company’s next invoice.
  • Far less paperwork – with a fuel card there is no need to keep receipts from fuel stations, so your company can claim VAT back. Instead, your company receives a single invoice that’s pre-approved by HMRC.
  • Rack up reward points – at participating stores, a driver will be able to claim rewards points when they purchase fuel and other items on a fuel card. This includes Nectar points at Sainsbury’s, Morrisons More points at Morrisons and Tesco Clubcard points at Tesco.

Will an employee have access to every fuel station?

Employees can fill up at various fuel stations, depending on which fuel card they have. Some cards provide access to just the stations of a single fuel supplier, such as Shell, although further third-party sites may be added. Other cards provide access to a wider range of fuel stations across the UK. For example, the Keyfuels card provides access to all Morrisons sites, selected Shell, Esso, BP, and Co-operative stations, as well as 20 Moto motorway sites.

We also offer a Supermarket fuel card, which provides access to over 1,300 Sainsbury’s, Tesco and Morrisons fuel sites.

As always, the best thing to do is get in touch with one of our expert advisers to discuss your employees’ needs, either by filling in our online form, emailing info@rightfuelcard.co.uk or calling 0113 202 5110.

If an employee uses their own car for work, will they have to pay tax on the fuel they use?

Using a fuel card for business purposes, such as commuting to work, does not class as a taxable benefit. However, tax charges will need to be paid if an employee uses their card to fill up with fuel for personal travel.

If an employee uses their own vehicle for work, then they could claim tax relief on the approved mileage rate. This helps to cover the cost of owning and running their vehicle. To work out how much your employee can claim for each tax year, they must:

  • Keep records of the dates and mileage of work journeys
  • Add up the mileage for each vehicle they’ve used for work
  • Take away any amount that you, the employer, pay towards their costs.

The approved mileage rates for different vehicle types are as follows:

Vehicle typeFirst 10,000 business miles in the tax yearEach business mile over 10,000 in the tax year
Cars and vans45p25p
Motorcycles24p24p
Bicycles20p20p