It’s bad enough that fuel prices are at ‘rip-off levels’, but fuel expense claims also generate lots of admin. And with 27% of employees – the vast majority of whom get away with it – admitting to inflating their mileage, chances are you’re paying more than you have to.
Read on for a spotlight on effective spend management that will keep your staff accountable, all while saving time and money.
This will come in handy – you don’t pay tax on fuel expenses if:
Alternatively, you can apply the road fuel scale charge to your VAT return. This accounts for private consumption, so you don’t have to work out which travel is business-related and which is personal.
In practice, because only fuel used on business drives is tax-free, staff must keep mileage logs as proof. Logs must at least include the:
Easy enough to keep in mind for them, but there are a few more things you should be aware of that will make fuel expenses an absolute breeze.
The way you see your fuel expense claims can either help your business shine or leave it in the dark. Usually, businesses process fuel expense claims in one of two ways:
HMRC accept advisory fuel rates as correct, so you don’t have to produce receipts as proof.
It’s a huge perk, unless you reimburse actual fuel expenses and these are higher than the advisory fuel rates. If that happens, you’ll need to prove that that’s how much the fuel really cost – or pay tax on it.
Your people still have to keep mileage logs to prove their trips were business-related. And the admin is a nightmare. You’ll either have to:
Luckily, there are more options you can stack up against this one when weighing the pros and cons.
Fuel cards are payment cards, but you can only use them to pay for fuel (and, sometimes, other motoring-related goods).
Your staff fill up at petrol stations within the fuel card’s network and swipe the card. Then, at the end of the month, you get a bill.
Unlike advisory fuel rates, HMRC don’t accept fuel card payments as correct. This means that if what you’re paying works out higher than the advisory fuel rates, you’ll need to produce receipts on request.
That said, fuel cards have several benefits:
These benefits make fuel cards very attractive. But the fact remains that they’re a rigid solution to a very specific problem.
Because you can only use fuel cards to pay for fuel, you’ll need to handle associated costs such as tolls, parking charges, accommodation, and meals some other way. This means more tedious admin.
And if you fill up at a station outside the fuel card provider’s network, you’ll also have to pay a ‘convenience surcharge’. If this isn’t bad enough, remember you won’t know exactly how much you’re spending until you get your statement (which has to be matched to receipts and uploaded onto your system).
So, advisory fuel rates and fuel cards – less than ideal solutions to your fuel expense management problems.
If you think fuel cards generate less admin that advisory fuel rates, then you’ll be delighted to learn how a prepaid card like Soldo makes things even simpler.
It starts like this: each card is pre-loaded with company money. From there, you can set limits based on:
This way, there are no surprises at the end of the month, and you don’t have to wait for month-end to pay bills.
You can also set budgets based on the length or frequency of a trip, and turn fuel spending off when staff aren’t on the road. How useful is that?
More to the point:
Soldo will give you a brighter perspective on your fuel spending, allow you to make better decisions driven by insights, and save you loads of admin time. What’s not to like?
Employees are lending companies £321 million a month through out-of-pocket expenses. People can halt client meetings and marketing efforts if you consistently delay reimbursements.
The right expense management service can save you from some serious damage. It can give you the tools to budget, track, and speed through month-end bookkeeping.
Whether it’s to cover fuel expenses or other business-related costs, Soldo can help you make life easier for your people – without you having to take your hands completely off the steering wheel.
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