Sylvie Willis
Fuel cards are a great way to save money on fuel costs, but they can also come with a variety of fees and charges that impact the overall cost of the card. The price of a fuel card depends on the provider, network, and services available, with some providers charging additional fees for paper invoices, replacement cards, and changes to company details. Cards like AllStar and fuelGenie have no joining or annual fees, while other cards may charge an annual membership fee of up to £40 per card. Some cards offer fixed weekly prices, while others offer discounts at specific stations or on wholesale prices. With so many options available, it's important to compare the benefits and costs of each card to find the best value for your needs.
Fuel Cards:
| Characteristics | Values |
|---|---|
| Purpose | Help businesses save money on fuel costs |
| Benefits | Reduced administration costs, access to reduced fuel rates, HMRC-compliant invoicing, servicing and repairs discounts, wider coverage, etc. |
| Cost | Varies based on provider, network, services available, and invoicing type (paper or digital). |
| Pricing Models | Pump price cards, fixed-price cards, list price cards |
| Hidden Fees | Annual charges, network service fees, replacement card fees, convenience charges, copy invoice charges, risk-based fees, etc. |
| Recommended Options | fuelGenie, Fleetone, JET, BP Plus Bunker, Costco Anywhere Visa® Card by Citi |
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What You'll Learn
Annual fees
Fuel cards are a great way to streamline fuel finances, especially for fleet operators. They offer a range of benefits, including reduced administration costs, access to reduced fuel rates, and other perks. While the primary purpose of fuel cards is to help you save money, certain cards, sites, and products carry an additional handling fee.
When it comes to annual fees, there is a wide range of common justifications given by providers for charging companies these fees, including administrative expenses and cost of production. These annual fees can impact the bottom line for companies, and it is important to consider them when choosing a fuel card provider. The annual fee is typically charged per card issued, and it can cost around £20 per card. For a small business with five drivers, this could mean an extra £100 on top of fuel costs. For a larger fleet with 100 vehicles, the annual fee could add up to an extra £2000.
It is worth noting that not all fuel card providers charge annual fees. For example, fuelGenie offers fuel cards that are completely free to join and use, with no annual charges, network service fees, or transaction fees. This can result in significant savings for businesses, especially those with larger fleets.
Some fuel cards may also have hidden fees or additional charges beyond the annual fee. These can include network service fees, convenience charges, copy invoice charges, and risk-based fees. There may also be charges for replacing lost cards or changing company details. These extra fees can quickly add up, increasing the overall cost of using the fuel card.
When considering a fuel card, it is essential to carefully review the terms and conditions to understand all the associated fees and charges. Comparing different fuel cards based on their benefits, prices, and coverage can help businesses find the most cost-effective option that meets their specific needs.
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Network service fees
The price of a fuel card depends on the provider, network, services available and whether you get paper or digital invoices.
Some fuel cards come with various hidden fees that can quickly add up, such as annual charges, network service fees, and replacement card fees. These fees can be justified by administrative expenses or the cost of production.
Some fuel cards, like fuelGenie, charge no fees for normal business use and have no annual fees. They also offer savings of over 3p/litre by consistently directing drivers to low-cost supermarket fuelling stations.
Other fuel cards, like the Fleetone card from UK Fuels, offer savings of up to 10p per litre. While there is no annual fee, there is a minimum usage charge of £300 of fuel purchased per month.
It's important to consider the benefits of different fuel cards and choose one that suits your needs, as some cards may have more benefits than just lower prices. For example, the JET card offers up to 35% off if you sign up with the AA, but it can only be used at JET stations, of which there are around 330 locations in the UK.
To avoid unexpected costs, be sure to read the terms and conditions of any fuel card before signing up.
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Replacement card fees
The cost of a fuel card depends on the fuel card company and the type of card selected. Some companies charge a replacement fee for lost or damaged cards. While the cost of a single replacement card might seem minor, frequent replacements can lead to significant expenses. Some providers may also charge an expedited shipping fee for urgent replacements.
Some fuel cards, like AllStar, have various hidden fees that can add up to extra costs for your business. These include annual charges, network service fees, and replacement card fees. The combined additional burden of these extra fees can reach £200 or more per card issued.
FuelGenie, on the other hand, does not charge any fees for normal business use. They do not charge annual fees, and their fuel cards are completely free to join and use. However, they do charge a fee of £5 for a paper copy of an invoice through the post, although it is free if requested by telephone or email.
Some other common fees charged by fuel card providers include account setup fees, APR, check processing fees, program administration fees, bank handling fees, issuance fees, inactivity fees, minimum usage fees, non-network fees, statement fees, and custom reporting or custom account project fees.
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Paper invoice fees
Fuel cards are a convenient way to handle fuel expenses for businesses that manage vehicle fleets. However, they often come with various fees that can impact their overall cost-effectiveness. While electronic statements are usually free, some fuel card providers charge a fee for paper statements. This fee is typically small, but it can become a recurring expense for businesses that require paper copies for record-keeping.
The cost of a fuel card depends on the provider and the type of card selected. Some cards charge a flat monthly fee, while others charge a fee per card issued. For example, a company with 25 cards for their fleet could pay $1,200 to $3,600 per year in card fees alone. Other fees to consider include transaction fees, setup fees, late fees, maintenance fees, and more. These fees can add up, especially for large fleets, and it's important to carefully review the fee structure before choosing a fuel card provider.
To avoid unexpected costs, it is essential to monitor fuel card usage regularly and make timely payments. Additionally, opting for electronic statements can help bypass statement fees. When selecting a fuel card provider, look for transparency in their fee structure and minimal hidden charges. Educating drivers and fleet managers about proper fuel card usage can also reduce fees related to card misuse or loss. By being vigilant and proactive, businesses can minimise the impact of paper invoice fees and other charges associated with fuel cards.
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VAT and tax compliance
Fuel cards can help businesses streamline their expenses and VAT claims. They can also help to simplify tax relief and business mileage. In the UK, a fuel card is not a taxable benefit when used solely for business mileage. However, if used for personal travel, fuel card tax becomes an issue. In such cases, the user must submit a report to HMRC detailing personal use across the fleet and pay NI contributions on the value of the fuel used.
To avoid employees using fuel cards for private mileage, employers should ensure that the cards are used for business purposes only. This can be achieved by asking employees to refund the cost of fuel purchased for personal use. Additionally, a fuel card supported by an online management system can help track driver data and monitor potential abuses.
To reclaim VAT on business expenses, including fuel, a business must be VAT-registered. If a business's annual taxable turnover exceeds £85,000, VAT registration is mandatory. If it is below that figure, the business can opt to register for VAT and claim VAT back on expenses. To claim VAT on fuel bills, the fuel must be used for business purposes, and the business must keep detailed records of mileage, including dates, distances, and journey purposes, as well as VAT receipts for fuel purchases.
Fuel card invoices can be HMRC-compliant, providing a breakdown of fuel spend, including which card was used, where, and when. This can simplify the process of claiming VAT, as there is no need to keep and manage physical receipts. These invoices are available for download from the fuel card portal, making it easier to comply with HMRC's record-keeping requirements.
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Frequently asked questions
The cost of a fuel card depends on the provider, network, and services available. Some cards charge annual fees, while others are free. Some common fees include network service fees, convenience charges, copy invoice charges, and risk-based fees. The price of fuel with the card also varies, with some cards offering discounts or fixed weekly prices.
Fuel cards can help streamline fuel finances for fleets and reduce administration costs. They offer access to reduced fuel rates and other perks like servicing and repair discounts. Fuel cards also provide HMRC-compliant invoicing, removing the need to save receipts, and make it easier to reclaim VAT.
Yes, certain fuel cards may have hidden costs such as annual charges, network service fees, and replacement card fees. Some providers also charge extra for paper invoices and if a payment fails. It's important to review the terms and conditions carefully to understand all potential costs.
