Stopping free fuel should not mean dropping fuel cards

It has been well publicised that free fuel as a staff benefit and from a cost angle doesn’t always make sense. For some drivers the tax payable on free fuel exceeds the benefit and employers sometimes lose out through National Insurance payments on top of the fuel that they pay for.

However, it is important that fleets don’t confuse free fuel and the use of a fuel card policy. In the current economic climate, withdrawing free fuel should certainly not mean ditching your fuel card because of the benefits that it provides.

While fuel cards provide the best way to capture fuel purchased, which allows the company to accurately pay back free fuel to employees, the two things are distinct. The benefits of using fuel cards are relevant to companies and drivers regardless of whether they receive free fuel or not, or even whether drivers use a company vehicle or not.

This list of benefits includes:

  • - Accurate reporting which shows where fuel spend is going across the entire fleet, groups of drivers or down to an individual level.
  • - The ability to reimburse business drivers the exact amount that they spend on fuel.
  • - A tool for monitoring and policing drivers, especially in relation to where they purchase fuel from and at what price.
  • - Reduced administration through consolidated invoicing which means that companies can easily claim back 100% of VAT.
  • - The ability to allocate fuel cards to specific vehicles which should identify maintenance issues and future vehicle selection through MPG performance.
  • - The ability measure and monitor the carbon footprint of the fleet.

 

Meryl Gilbert, Head of Business Development – Fuel at Arval comments:
“Fleet managers must make the distinction between a free fuel policy and the use of fuel cards. Fuel cards are the best way to monitor and manage fuel expenditure and so make sense irrespective of whether drivers receive free fuel or not.“

She adds, “Employees who continue to receive free fuel as part of an overall benefits package should regularly calculate the tax efficiency of the benefit. If after review free fuel is removed there is absolutely no reason to stop using the fuel card as it benefits the employer and the driver.”

 

For further information please call Graham Nichols, PR Manager, on 01793 884453 or E-mail graham.nichols@arval.co.uk

Editor’s Notes

Arval Contract Hire Fleet & Fuel Management Specialists 

Arval is the leading fleet and fuel management company in Europe, owned by BNP Paribas, one of the largest European banking groups, with substantial buying power and a commitment to quality through over 30 years fleet management experience. Arval is a people lead company, with specialist teams dedicated to businesses from start-ups to FTSE 100