Whether you’re a small business or a large international company, deciding to move to business 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 with significant benefits. They have emerged as a valuable tool in streamlining the process of purchasing fuel and managing expenses associated with company vehicles. But how do fuel cards work for employees?
In this article, we'll answer common questions like how fuel cards work for employees and why fuel cards are so beneficial for businesses.
What is a fuel card?
A fuel card is a payment card specifically designed for purchasing fuel or other vehicle-related expenses. These cards are typically issued by fuel companies, banks, or other financial institutions and can be used at specific fuel stations or a network of stations affiliated with the card issuer.
They are convenient for businesses with fleets of vehicles as they can help track fuel expenses, control spending, and often offer discounts or rewards for fuel purchases. Fuel cards can also provide detailed reports on fuel usage, making it easier for businesses to manage their expenses.
Who uses fuel cards?
Fuel cards are commonly issued by companies to employees who do a lot of work-related driving. Construction companies may distribute these cards to staff operating vans, pick-up trucks, and larger equipment. People who use company cars may also be provided with fuel cards, as well as emergency services.
How to use a fuel card
Here's a general overview of how to use a fuel card:
- Apply for your business fuel card with our quick and easy online application. Or give us a call on 0113 202 5110 to have a chat with one of our expert advisors.
- Once your preferred fuel cards arrive via post, simply hand them out to the designated drivers (each card is tailored with the driver's name).
- Your employees can use our online petrol station finder to locate fuel stations that accept the specific fuel card they have.
- At refueling stops, your drivers will be able to smoothly pay for their fuel using their designated fuel card.
- If your company operates with a pump price card, you'll be charged based on the current pump price. Alternatively, with a fixed weekly price card, the invoicing reflects the agreed-upon fixed rate.
- All purchases completed through your fuel cards will be clearly itemized in your invoices, and payment will be taken via direct debit.
- Using our free online account management portal, you'll gain access to a wealth of information for each fuel card used by your drivers.
- Enjoy convenience and efficiency at your fingertips!
Benefits of fuel cards for employees
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.
Can fuel cards save my business money?
Not only can fuel cards reduce your fuel costs but at Right Fuel Card we have no interest charges. 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.
Where can fuel cards be used?
The size of your fleet and where your business operates in will influence which fuel card is best for you.
We work with premium fuel brands such as Shell, BP, and Esso; the card networks UKFuels and Keyfuels, plus Texaco and a range of supermarkets. This is to provide you with the widest selection of fuel cards to choose from.
Are there any risks to giving employees 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 business 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 employees 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.
Tax considerations for employee-used cars
Using a fuel card for business purposes, does not class as a taxable benefit, for example commuting to work. 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 type | First 10,000 business miles in the tax year | Each business mile over 10,000 in the tax year |
|---|---|---|
| Cars and vans | 45p | 25p |
| Motorcycles | 24p | 24p |
| Bicycles | 20p | 20p |
Fuel cards streamline the process of managing fuel expenses for employees who rely on company vehicles. They offer convenience, control, and transparency, benefiting both employees and employers. By simplifying transactions, providing oversight, and offering potential rewards, fuel cards have become an integral tool in modern business operations.
As an employee utilising a fuel card, understanding its workings and leveraging its benefits can significantly enhance efficiency and ease in managing work-related travel expenses.
FAQs
It depends on how your company has configured the account. While some fuel cards are restricted to fuel purchases, others enable buying oil, AdBlue, and even car washes. Certain cards may even facilitate payments for charging electric vehicles.
Yes. If your company is VAT registered, you're eligible for a fuel card. However, certain fuel card providers may require a minimum monthly expenditure to qualify.
Fuel cards offer a fantastic advantage by streamlining fleet management, potentially cutting down on administrative expenses. Rather than dealing with numerous claim forms and credit card statements, you usually receive just one invoice, simplifying the process.
Fuel cards are typically issued for business or commercial use rather than personal use. These cards are specifically designed to facilitate fuel purchases for company-owned vehicles or employees using vehicles for work-related tasks.
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.
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.
 | David JamesDavid has worked in the fuel card industry since 2008. His financial insights have been featured in various publications, such as The Sun, the Daily Express and The Yorkshire Times where he provides money-saving tips for motorists. David is passionate about charity work and regularly raises money through running events, including the London Marathon and the Leeds Abbey Dash. |
