A company car, a good pension and private health insurance are all common workplace perks. But there's another benefit gaining traction among modern businesses: the humble fuel card. Once seen as the preserve of logistics firms and couriers, fuel cards are now being used by a much broader range of businesses to add value for their staff.

As small and medium-sized businesses look for new ways to attract and retain skilled employees, offering practical, money-saving benefits like a fuel card can make all the difference. Whether your team is on the road every day or just driving occasionally, there are clear advantages for both the business and the staff.

If you’re weighing up the pros and cons or simply want to see what’s out there, this guide takes a closer look at how offering fuel cards as an employee benefit could work for you.

Understanding the Tax Implications of Fuel Cards

If an employee uses a company-issued fuel card for personal travel, including their daily commute, this counts as a taxable benefit. In simple terms, they’re using company funds to cover personal fuel costs, which the tax authorities see as a benefit in kind.

That means the employee pays tax on that benefit, and the employer also pays a National Insurance contribution. While some staff may still find value in it if they travel extensively, for others the extra tax can outweigh the benefit.

A common solution is to restrict fuel card use to business-related travel only. Staff then repay any private fuel use to the business. This approach keeps things clear and avoids unnecessary tax charges.

Why Employers Choose to Offer Fuel Cards

Saving money is a strong motivator. Fuel cards can unlock savings on petrol and diesel, depending on how and where they’re used. For businesses with multiple vehicles on the road, even small savings per litre can add up over time.

Some cards offer discounts at specific fuel stations. Others are accepted across a wide network. Choosing the right one comes down to knowing where your staff usually refuel. If your team needs to go out of their way to use a card, it’s unlikely to be seen as a useful perk.

For companies with travelling teams, the convenience of not dealing with cash or receipts can be a real plus. Employees can refuel with a quick tap, and you get all the purchase information centrally.

Cutting Down on Paperwork and Admin

Traditional fuel claims involve receipts, forms and manual tracking. With fuel cards, this hassle is largely removed. Instead of piles of receipts, the company receives a single HMRC-compliant invoice. This simplifies accounting and reduces time spent chasing paperwork.

You’ll also get a full view of how much is being spent, where fuel is being purchased and how often. This helps spot patterns or issues and allows you to manage expenses more effectively.

In short, less admin means more time focused on running the business.

Fuel Cards Are More Than Just Fuel

As technology advances, fuel cards are offering more features. Some allow payments for tolls or parking. Others can be configured to cover specific business costs, depending on your policy.

These extra features can increase their appeal and provide more flexibility for both the business and its staff. Having everything connected through one card makes tracking expenses much easier and ensures that spending stays under control.

What to Watch Out for as an Employer

There are a few potential downsides to be aware of. Some providers charge a fee per card or an annual cost. While these are often outweighed by the savings made on fuel, it’s important to understand all the charges before committing.

Think about it from your staff’s point of view. Will the card save them time? Will it make their working day easier? If not, it might not be seen as much of a benefit.

Some cards are limited to specific fuel networks. If your staff are regularly travelling outside those areas, the card could end up being inconvenient. Choosing a card with wide acceptance is usually the better option.

The Benefits for Employees

Fuel cards can make life easier for your team. They no longer need to keep track of receipts or make upfront payments and then claim the money back. All the information is recorded digitally and sent straight to your finance team.

For staff who do a lot of driving, some fuel cards allow them to pay a fixed rate for private mileage, which can help with budgeting and give peace of mind.

Cards that allow pay-at-pump use with chip technology also mean quicker transactions. It saves time and removes the need to queue inside busy service stations. This small convenience can make a big difference over the course of a busy week.

The message it sends is clear. Offering a fuel card shows staff that you value their time and want to make their lives easier.

Possible Drawbacks for Employees

Fuel card use for private journeys, including commuting, is still a taxable benefit. If this isn’t clearly explained, staff might end up with an unexpected tax bill.

It’s also worth noting that not all cards offer discounts everywhere. If staff need to divert to specific stations to make use of the card, it might cause frustration. Time spent finding a suitable place to refuel can quickly become an issue.

Open communication and a clear policy on how the card should be used helps avoid confusion and ensures everyone understands the benefits and any obligations.

Responding to Changing Needs

Today’s workforce values flexibility and practical perks. Offering a fuel card won’t make or break a job offer, but it does help build a picture of a company that cares about its team.

As the working world evolves, businesses need to find new ways to meet the expectations of staff. A fuel card is one example of a low-cost, high-impact benefit that can help improve morale and reduce stress for mobile staff.

Whether you’re just starting to explore your options or looking to upgrade your current setup, there’s likely a fuel card that fits your needs.

Make Fuel Cards Work for Your Business

Fuel cards aren’t just for large logistics firms. They’re now used by a growing number of small and medium businesses across many industries. The right card can offer savings, improve efficiency and show your staff that you value their work.

From reduced admin and fuel savings to added convenience and a better employee experience, there are many reasons to consider adding a fuel card to your benefits package.

At Expert Compare, we help business owners and decision-makers find the right solutions for their needs. If you’re ready to explore the best options on the market, use our quick comparison tool to see what’s available and start saving.

Compare business fuel cards today and see how much your company could save.