A fuel card is a kind of payment card that allows a business to be in charge of the expenses linked to vehicles it owns and operates. Provided by the main oil companies, these cards work in a similar fashion to charge cards. A business provides its personnel, mostly transportation staff with fuel cards which can be used for paying for fuel, vehicle maintenance, and repairs. Although fuel cards UK can be traced back to the mid-’80s when they were first introduced, some people are yet to fully understand how fuel cards work. So, can you get a fuel card for personal use? We will tackle this question in the article. But before then, here is how a fuel card works.
How Fuel Cards Work
Fuel cards have been in use in the UK since the 1980s. Companies issue them to staff who drive corporate cars. Most of the companies using fuel cards are in the transport sector. They are most likely to be used by companies doing delivery services and those in the trucking business.
Also known as fleet cards, fuel cards UK are typically issued by one company. In other words, fuel cardholders are only capable of using them at locations that are owned, franchised, or operated by the issuing company. Similar to an ordinary payment card, fuel cards are laser-printed or embossed with vital details like card number, company name, name of the person authorized to use it, and expiry date. Modern cards have a microchip complete with a magnetic stripe found on its back that enables it to be used at a POS terminal.
Organizations give fuel cards to employees and drivers who use them as opposed to personal cards. This way, the company issuing the card can bill the business directly instead of charging the employee who would then need to submit expense reports and receipts to be refunded at a later time. At the end of the month, the card provider prepares a single bill containing an itemized list of individual purchases by each user. Fuel cards, like charge cards, do not attract any interest. The reason for this is that businesses are expected to clear all the outstanding balances fully when the date is due.
Can you get a fuel card for personal use?
If you want a fuel card that you can use for your private use, I’m sorry but this does not exist. The reason is that for a fuel card to b issued, one of the requirements is that you show proof of registration of a company.
In the past, a fuel card has always been associated with a company car. However, it is possible for employers to give their workers a fuel card without issuing them with a corporate vehicle. It means that, as an employer, you can avail a fuel card to your employees without accompanying it with a car.
Give your employee support
It could be that you want to appreciate your employees but the financial constraints of the day don’t allow for a company car or a salary raise. The best option for you is to use a fuel card with no company vehicle. However, your employees will have to accurately register the kind of travels they make. This is because, due to tax computations, HMRC will need to distinguish between:
- Pure professional journeys on behalf of your company
- Commuting, which are the daily trips to and from work
- Pure private trips
What are the options for personal fuel cards?
Today, most fuel stations will have prepaid options and apps that customers can use to separate the expenses related to fueling and also to give friends and family as gifts. For example, BP has a BPme app that you can get for your family or spouse and can be used at any participating station. This eliminates the need to give out a physical credit card.
There are also other prepaid options like gift cards that form a great alternative for people who want to have control of their cash flow. You just have to prepay the amount and then give the cards to the intended person to use at select stations.
Caltex has their StarCard, which is the only personal fuel card that boasts business fuel card-like properties such as tracking usage. StarCard is a debit card, so it is linked to a user’s bank account, and there is no credit check required as you are using the money you have in your account already. This option of prepaid cards has several options like:
· The ability to access your account online and track the usage of your card
· It does not have monthly charges or fees
· You enjoy a fuel discount of 2-4p per litre.
The benefit of all nature: it’s calculated differently
For normal fuel cards UK, the authorities compute the benefit of all nature by basing on the carbon dioxide emissions and the catalogue value of the car. It does not matter how much you consume. The social security contributions and payroll tax remain unchanged.
But when it comes to a personal business card, the tax authorities consider the actual fuel usage when computing the benefit of nature. This means that the benefit you will get takes into account the price of the fuel that an employee filled. This means that a fuel card for personal reasons isn’t as interesting for tax authorities as that where a company car is involved.
As a result of the many benefits of fuel cards, people are asking if there is one for personal use. Unfortunately, fuel cards do not exist for personal use. Because you are getting fuel on credit to clear at the end of the month, the existence of a company is a stringent requirement. However, there are prepaid gift cards that other oil companies have put in place. You can give these to employees to use for their daily commute to the work. The cards can also be given to family or friends as a gift.