Fuel cards simplify the process of fleet management because it allows your drivers to pay for fuel using a fuel card issued by the company and not have to carry cash around.
The fuel card from Fuelcard.com is accepted at over 3,000 outlets across the UK, and this includes all major motorway refueling stations and the main supermarkets. Whether you already have a fuel card or are a first-time user of UK fuel cards, Fuelcards.com gives you the perfect fuel management tool for your business. In this article, we explore the viability of fuel cards for small businesses.
Fuel expenditure
At a first glance, you may not realize that switching to the use of fuel cards can impact your fuel expenditure. It is, after all, just an alternative way of paying for the fuel you have used.
But the truth of the matter is that, with the right fuelcard, you can bring down the business cost of fueling. Fuelcards.com, for example, is very careful with the supermarket forecourts and oil companies that it uses. Also, they sell fuel at discounted prices which are lower than typical pump rates. This can translate to significant savings especially if you run a large fleet.
What additional costs do UK fuel cards come with?
The answer to this question depends on the specific fuelcard you choose. It is up to you to do research and ensure that you don’t get a card that has hidden charges.
Depending on the fuel card you use, you may be charged different fees like annual fees, the fee per each card issued, convenience charges, risk-based fees, invoice charges, and network charges.
Other employee expenses
Fuel cards enable a business to control fuel spending at the pump, unlike company and pay-and-reclaim cards. This way, it restricts what your employee can pay for with the card and what is not allowed. Apart from diesel and petrol, a fuelcard can be authorized to pay for other vehicle-related expenses, for example, car washing.
Some cards may also allow the purchase of food items and drinks, while others do not cover any expenses at all. This way, fuel cards help business owners to ensure that the only costs they incur are those of fueling the trip.
Administrative costs
Another advantage of switching to a fuel card is that it can greatly decrease accounting time and administrative costs. The pay-and-reclaim system requires that drivers keep receipts for every purchase. But a fuel card eliminates all of these administration costs. It then keeps all your transaction records in a virtual dashboard that you can access anytime you want. The card vendor automatically generates an invoice each month, eliminating the need for keeping paper receipts. Additionally, the invoices generated are HRMC-compliant, which makes it easy and simple to submit VAT claims.
Tax implications
When your employees only use fuel cards for paying for fuel for company cars, you can stay away from tax complications. This is a business expense, which means that it is incurred while traveling for work purposes. You must instruct your employees never to pay for fuel for private travel, and this includes trips to and from work.
Doing this enables you to avoid a situation where the fuel card becomes a taxable benefit. This way, a fuel card functions as a company card used for covering business expenses.
What Fuel Cards Give You
UK fuel cards not only offset fuel spending but also allow you to take advantage of the normal credit card promotions from specific merchants. The following are some of the things your fuel card gives you:
- Cashback: Save money while you pay for fuel with cashback that ranges from 0.3% to 10%. But the majority of fuel cards impose minimum expenditures for one to qualify for cashback. That means you should choose the best fuelcard depending on the patterns of your spending.
- Rewards: A rewards programme earns you points for each ringgit spent. The rates vary depending on the fuel card and the merchant. However, the nominal rate is a point for RMI. This can go up to even 10 times during promotions.
- Promotions: The majority of credit cards offer cashback, rewards on spending at specific merchants, and discounts. This enables you to enjoy discount privileges each time you travel, shop, or dine.
Caps on cashback and spending patterns: Banks put a limit on the maximum cashback and also a requirement on your minimum spending.
The petrol station you choose: When choosing a petrol station network, choose a brand you can access easily where you are going. But in the absence of a particular favorite brand, your best bet is to go with a cashback card.
- Unpaid balances: Carrying a balance constantly negates any gains you make because the merchant will charge an interest on it.
Is it worth it?
Do you feel pain when you take your car to a petrol station for filling up? If so, you just need to join the fuelcard bandwagon. Even if your company has the most efficient cars, fuel consumption can still put a dent in your budget. While a small increase may not appear like much on its own, it can become significant when you take into account the number of liters of fuel you use when sitting in the traffic every day.
For most people, credit cards mean debt but the correct choice of a fuel card can enjoy the full benefits of fuel cards. Make sure you settle your credit card bills on time and avoid balances. This will avoid a situation where you are penalized with high-interest rates. Also, it can affect your credit rating.
Banks realized the importance of budgeting for fuel and in exchange for a fee, decided to create fuel cards. So, are fuel cards beneficial for your business, or are they a way that banks are using to charge customers? In our view, we think there is every reason to switch to fuel cards. They offer a convenient payment method and streamline business operations because of effortless invoicing.