Alongside a company car, a parking space and a dental 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 a bargaining chip is because the types of firms using them have changed considerably – many new, 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 with 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 use is evolving.
Currently a quarter of company car drivers use fuel paid for by their company for private use. This option is becoming less desirable among both employees and employers due to the high cost of fuel and company car taxation.
When an employer pays for fuel used on private mileage, it incurs a fuel benefit tax for the employee that 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 and it ultimately hits them in the pocket.
That’s why fuel cards are becoming an increasingly popular way of simplifying the whole process, letting staff purchase work-related fuel with the card and then pay back any private use to their employers.
So, baring this in mind and reflecting the changing business landscape, we wanted to dig a little deeper to focus on the pros and cons of offering fuel cards as a staff perk.
To give some facts and figures around private fuel usage, HMRC data from 2011/2012 to 2014/2015 shows that staff using private fuel as a BIK has decreased by 40,000. This suggests that employers and employees in some pay brackets are realising the true cost of the benefit and are moving away from it.
As companies continue to move away from offering BIK fuel, the landscape will change considerably again. This means it’s a great opportunity to compare fuel cards to ensure that they are delivering the same performance they once were.
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, while others can be used across an extensive national network. So it’s important 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.
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 without the need for petty cash and be assured that they won’t return with a glove box full of receipts.
As well as fewer receipts, fuel cards provide companies with one HMRC-compliant invoice, which across a large business 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 efficiency and security of your fleet.
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 tolls and other services while other cards combine the functionality of a charge card, allowing your staff to pay for business expenses as well.
Some Fuel Card companies charge a cost-per-card or an annual fee per card issued. These fees are usually more than offset by fuel savings, but when you’re researching your options it makes sense to be aware of any potential fees before you sign up.
A good way to look at it is to think of it as a job interview. Your fuel card candidates need to deliver the skillset your looking for to take your business to the next level, so scrutinise them as you would a prospective employee. Ask questions, look at the pros and cons, and see if they’re the right fit.
Then, 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 less desirable for them?
Naturally the biggest one is the fact their business fuel admin is dealt with by the company. There’s no need for them to keep receipts as all their use is recorded and then sent directly to your admin department.
Employees who clock up high private mileage can also benefit knowing they pay a set cost every month. So they can drive without worry which provides them with freedom and enhances the sense the card is a ‘perk’.
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.
Some fuel cards only provide savings at the pump if the driver only uses fuel stations on a particular network. 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.
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.
By comparing fuel cards you can find the one that offers the best value for your requirements.
Many fuel card features come as standard but they have different benefits and usage restrictions so find the one that’s right for you.
The best way to find the right card for your business is to compare their specific features, then you can choose with confidence.