Author: Simon Pavey

Calculating taxes with coins, calculator and toy car

Do company drivers save money by claiming for private fuel?

Posted on | by Simon Pavey

For drivers of company cars, it is possible to have their employers pay for their private fuel. However, the number of drivers making use of this benefit has been declining in recent years.

When drivers use their company car for personal use, they accumulate private miles. This mileage could be quite small, however if the driver were to use the vehicle in multiple cross-country journeys over the year, their private miles would add up extensively.

Therefore, having your private fuel paid for by your employer may seem like a great deal. Despite this, however, there is a reason drivers are choosing to simply reimburse their employers for the fuel instead.

Car Fuel Benefit Charge

Whether your employer pays for all of your fuel or not, you will already be paying tax for your company car. This amount depends on the specific vehicle and engine, the listed price when new, and the CO2 emissions measured in grams per kilometre (g/km).

This is referred to as the benefit in kind charge, and is added to your taxable income for the year. Online calculators are available to work out how much tax you’ll be paying for your specific company car.

When your employer covers your private fuel, you become subject to an additional tax – the Car Fuel Benefit Charge.

This extra charge can negate any benefits of having your employer pay for your fuel, depending on the type of car and your usage.

For example, imagine you are doing 4400 private miles in a diesel car with CO2 emissions of 100g/km. As a basic rate tax payer (20%) In 2021, you would be paying £1,377.60 in tax for this benefit, whilst the value of the free fuel you have used would be just over £645. In this example, having your employer pay for your private fuel is financially detrimental.

In fact, in this vehicle, you would have to be doing over 9396 private miles just to break even. This is potentially very unrealistic. In 2019, the average UK driver was only doing 4400 private miles.

Silver coins stacked in front of grey toy car

Reimbursing your employer

These figures show that the only way to financially benefit from your employer paying for your fuel is by doing enough private mileage, so the overall cost of your used fuel is greater than the Car Fuel Benefit Charge.

The alternative would be to reimburse your employer for any fuel used during your private mileage. By doing so, one would eliminate the Car Fuel Benefit Charge.

You’ll need to monitor your private mileage over the year to calculate how much you should be repaying your employer. You can do this by keeping your receipts, but keeping track of this is easier with a fuel card account.

Multiply your mileage by the HMRC’s advisory fuel rate for your vehicle. Assuming the engine size of your vehicle is between 1601cc to 2000cc, that rate is 11p per mile in 2021.

By multiplying this rate with the average UK private mileage gives us a cost of £484 to be reimbursed to the employer.

This is instead of paying £1377.60 in car fuel benefit charge, and saving £827 in the process.

Few company car drivers claim private fuel

As of 2020, only 12% of company car drivers were receiving the benefit of having all of their fuel paid for by their employer. This figure has been falling over the last decade. In 2010/11, 250,000 drivers were having their fuel paid for by their employer, costing a total of £360 million in tax. By 2018/19, only 110,000 drivers were receiving these benefits.

This is likely due to the higher than average number of private miles required by the driver to break even. Also, rising fuel prices would have encouraged drivers to evaluate their situation more carefully. They might have noticed that their savings were being nullified by the Car Fuel Benefit Charge.

If you are one of the 12% that still claim private fuel, consider using the above calculations. You can determine whether you could be saving money by simply reimbursing your employer instead.

To find out more about how your company could be making great savings on fuel, get in touch with our team – we’re happy to help.

Electric car at charging point with digital graphic overlay

What are the implications of accelerating the shift to zero emissions?

Posted on | by Simon Pavey

The UK’s shift to a low-carbon economy is well underway. Yet amid concerns that original plans weren’t ambitious enough, it’s now clear that the pace of this change is accelerating. This means businesses have less time than they may think to adapt their operations to the new way of thinking.

This will affect many aspects of how firms operate, but one particular focus will be on their transport operations. Fleets will have to start moving toward a low or even zero emission future quickly. If they don’t, they risk falling foul of new rules, being left behind by competitors, or facing large additional costs.

The coming changes to the UK’s transport network

The UK’s transportation network will be at the heart of the drive to a carbon-neutral future. According to government figures, the transport sector accounted for 27 per cent of UK greenhouse gas emissions in 2018. What’s more, 90 per cent of this came from road traffic, so it’s clear this will have to be a top priority when developing a low-carbon economy.

That’s why the government is bringing forward plans to move toward electric cars. It’s committed to banning the sale of any new fully petrol or diesel vehicles by 2030 – a decade earlier than previously expected. While some hybrid models will still be allowed after this date, these too are expected to be phased out by 2035. While for now, second-hand sales are unaffected, it will mean fleet buyers have to rethink their plans.

At the same time, the use of low-emission zones in many towns and cities is also set to become more commonplace. If you’re still relying on a heavily petrol and diesel-based fleet, this could mean it becomes prohibitively expensive to operate in urban areas in the coming years. Therefore, you’ll need to have at least some of your fleet using low or zero-emission vehicles to avoid this.

Do you need a zero-emissions fleet?

Close up of an electric car charger with female in the background

If you’re planning on buying new vehicles after 2030, you won’t have any choice but to go electric or hybrid. But you shouldn’t be waiting until this date to make plans for a zero emission future. Firms that run electric vehicles (EVs) can already take advantage of reduced running costs, lower emissions and a better reputation among customers.

Many larger brands are recognising the benefits of a zero-emissions approach to their fleets. Parcel delivery firm DPD, for example, which runs a large fleet of vans, added over 700 EVs to its fleet in 2020. This means more than ten per cent of its vehicles are now electric. By 2025, the firm aims to reduce its final-mile emission by 89 per cent, using EVs only for 25 of the UK’s largest towns and cities.

Chief executive of the firm Dwain McDonald said: “We know retail customers want this and the reaction on the doorstep is great when recipients see that their parcel has been delivered emission-free too. So, that is a great base for us to build on.”

It’s clear, therefore, that if companies want to keep customer satisfaction high, adopting a zero emissions goal for their fleets will be essential. They will also have to do this sooner rather than later – not just to meet regulations, but to keep up with competitors.

The challenges of moving to electric vehicles

Of course, moving to an all-electric fleet is easier said than done. There will be a range of challenges involved in this, and it’s not something you should be attempting to do all at once.

Among the questions you’ll have to answer when adopting these vehicles are:

  • Where and how will these vehicles be recharged?
  • How do you reimburse drivers for electricity usage?
  • Will employees have to change their driving styles to use EVs efficiently?
  • Should you install dedicated charging points – and if so, how much will these cost?
  • Will drivers be resistant to EVs?
  • Will you have to alter your route planning to take into account charging points?

With careful planning and communication with employees, many of these issues can be overcome. And the sooner businesses start thinking about this, the better placed they’ll be when EVs are the norm.

One issue will be charging speeds. Traditionally, ‘refuelling’ EVs with power is a much lengthier process than dropping onto a forecourt for a couple of minutes. But this is beginning to change. Charging technology is improving all the time and fuel brands are also starting to focus more closely on this area.

BP Pulse for example, recently announced a new partnership with The EV Network that will greatly expand its fast-charging infrastructure. The company is aiming to have 16,000 charge points by 2030, with a particular priority placed on ultra-fast chargers.

Managing a mixed fleet

Close-up of a row of parked commercial vans

Another challenge will be how you manage a mixed fleet of petrol, diesel and electric vehicles. This can be especially challenging when it comes to managing the expenses associated with keeping cars on the road.

However, there are an increasing number of solutions available to help with this. For example, more companies are developing electric fuel cards that can help fleet managers keep control of their EV cars and vans. In the coming years, these will be essential for many businesses in ensuring their employees can keep their electric cars ready for whatever the business demands of them.

Shell, for example, has introduced a new EV card that can be used at any of its Recharge points throughout the UK. There are currently over 100 of these, but the brand is aiming to have more than 5,000 such charging stations operational by 2025.

Having fuel cards that offer cost savings and ease of use for all vehicles in a fleet, whether these are petrol, diesel, hybrid or full electric, will be a key priority for many businesses in the coming years. With an EV-first environment closer than many firms think, they will have to plan now for the future.

If you want to know more about how to incorporate electric cars into your operations, get in touch with Fuel Card Services today for expert advice.

Allstar adds 110 charging points to the EV network

Posted on | by Simon Pavey

In a recent deal with Gronn Kontakt, Allstar have secured an additional 47 charging sites to their network. These sites add 110 charging points to Allstar’s multi-branded network.

Gronn Konakt, an electric vehicle charging company, are owned by Statkraft. This is Europe’s largest producer of renewable energy and is owned by the Norwegian state.

For customers of the Allstar One Electric card, this deal is great news. They now have access to these 110 charging points. This is the 8th network of charging sites to be added to their network. Users of this card now have access to over 1500 locations in the UK with 3700 individual charging points.

The Allstar One Electric card includes the benefits received by customers of the Allstar One card. Customers are not only given a way to pay for the use of charging stations, but are also given access to Allstar’s massive multi-branded network of fuelling stations with savings on diesel.

Why do we need more electric charging points?

These additional charging sites are a response to the government’s plan to ban the sale of new petrol or diesel cars and vans in 2030.  The ban is part of a 10-point plan for a “green industrial revolution” set out by the UK Prime Minister.

Along with a shift towards nuclear power and the development of towns heated entirely by “low carbon” hydrogen, the government hopes to phase out petrol and diesel vehicles and invest in electric charging infrastructure.

Therefore, over the next few years, businesses will be making the transition to a fleet of electric vehicles. The Prime Minister has said that some hybrid vehicle will still be permitted for development, which is an attractive option for HGV users who might be concerned that an electric vehicle can’t match the power of a vehicle that uses diesel, for example.

Allstar have stated that 30% of their customers have already switched to electric vehicles in their fleet. A further 65% of their customers plan to make the transition over the next 3 years.

With so many electric vehicles being introduced to the road, we can expect to see more charging stations in the near future.

Electric vehicle charging cable connected to electric car

Reducing charge point and range anxiety

These extra charging sites will greatly reduce anxieties regarding electric vehicles.

Users of electric vehicles have often expressed concerns about running out of charge during transit. Research also shows that electric vehicle users are now more anxious about being unable to find a point to charge their vehicle.

These anxieties have been putting fleet owners off the idea of transitioning to electric vehicles. Different vehicles also require different connectors when charging. Because of this, fleet owners who desire convenience would much prefer to stick with fuel powered vehicles until a universal charging method is commonplace.

However, adding more sites to the UK’s network of charging points means drivers have less cause for worry. They will have more options as to where they can charge their vehicle and are less likely to run out of power.

Once a fleet owner is convinced that their drivers will have access to enough charging points, and charging is as convenient as filling up a tank at fuel pump, they will be much more likely to transition to electric vehicles.

How can you prepare for the 2030 ban?

Over the next decade, you can expect to see a huge increase in electric vehicles on the road. Since the government plans to phase out diesel and petrol vehicles, electric vehicles are the inevitable future. It’s worth considering how your fleet can adopt the use of electric vehicles.

If you’d like to know what you can do to prepare for this transition, get in touch with our team. We’re happy to help.

We often overlook the key characteristic of the rainforest: rainfall

Posted on | by Simon Pavey

Earth’s rainforests receive high levels of rainfall each year, often up to 400 inches compared with less than 40 in the UK. A great deal of this rainfall comes from the fact that rainforest is often self-watering. Through transpiration, plants release water into the local atmosphere. This creates a dense cloud cover that you see hanging over rainforest canopy. Even when it’s not raining, these clouds keep the rainforest ecosystem humid and warm. It’s this immense heat and humidity that has meant a vast range of animals and plants have adapted to this specific climate over the years.

At the global level, rainforests drive the flow of water as rain. They are the centre of the water cycle, circulating water vapour and feeding rivers that eventually take water back to the oceans. Evaporation from the oceans is seeded by organic dust and particles created by the trees themselves. It is a remarkable system, working simultaneously at microscopic and planetary levels, full of intricacies and interdependencies.

But this means that as rainforests shrink, droughts increase, both locally and around the world. Evidence is already showing that forest loss in the tropics is already affecting crop growth worldwide. At the local level, despite the huge volume of water found in and produced by rainforest, access to the right amount of water is becoming more problematic for local people.

There are increasing reports of rivers turned gold from mining waste in the Amazon, palm plantations polluting coastal waters in Papua New Guinea and sea-level rise flooding crops and causing havoc on sanitation systems. It’s why your support is so vital, both locally and globally. You’re keeping rainforest standing at the heart of the water cycle, by supporting local communities with access to good quality water and to cope with the effects of deforestation and climate breakdown.

In recent years, your investment provided fresh-water storage tanks and flood-resistant toilets to reduce local pollution in Papua New Guinea, tippy-taps to provide safe handwashing and fish ponds to avoid fishing in rivers with mining pollution. All alongside helping develop sustainable incomes that work with the forest, help people earn a living and reduce pressure on their forest. Healthy families mean healthy forest, and that often starts with something easy to take for granted; water.

It’s why keeping rainforest standing is not only vital for those who call rainforest home but for us all, to ensure Earth’s systems that we all rely on are kept in balance. The support Cool Earth receives is not only protecting forest, it’s also helping address the increasing challenges of getting good, clean water in the right places for local people.

Fuel card services are working with Cool Earth to mitigate global carbon emissions by preserving the most threatened rainforests. Get in touch now to find out more about what we’re doing to help.

The importance of fleet duty of care

Posted on | by Simon Pavey

All UK companies have a legal obligation to ensure their employees don’t suffer any unreasonable or preventable harm or loss in the workplace. This is known as duty of care.

Employers can be found liable is an employee or a member of the public is harmed or incurs loss as a result of negligence. Therefore, it is vital that all fleet operators carry out the relevant safety checks on owned vehicle to make sure that they’re safe to use.

It’s important to note that if a vehicle is owned by a company, it is considered a place of work, so healthy and safety rules apply just as they would within an office, warehouse or any other workplace. According to the department of transport, over a quarter of road traffic accidents may involve someone who is driving as part of their work obligations.

When it comes to road safety, much of the legal responsibility is on the driver. That’s why it is up to you to ensure your vehicle is safe, well maintained, insured and that it is being driven in a safe manner. An employee caught driving recklessly is responsible for any offence that comes as result.

However, employers also shoulder some of the responsibility for their employees’ actions. For example, employers are liable for the death or injury of an employee or injury of an employee caused by another employee through negligence.

Additionally, both parties may be found liable if a driver is caught speeding as a result of impractical employer scheduling.

What this means for fleets

For fleet operators, it’s important to acknowledge that company owned vehicles are considered the workplace, and that you have an obligation to ensure those vehicles are correctly insured and are safe to drive. It’s also important that you set up ‘safe systems of work’ procedures to assess and minimise the work-related risks and hazards your drivers could face.

As a fleet manager, there are three areas of risk management you should focus on in order to comply with duty of care:

Vehicle

All company-owned vehicles should be suitable for the job at hand and should meet the driver’s needs. Security is also a priority, not just for the driver, but for all road users. Regular maintenance checks and inspections are essential for maintaining the highest possible standards.

Driver

Before employing a new driver, ensure they are properly vetted and that appropriate checks are done on their licence. Make sure that they’re given a thorough induction to the fleet procedures and policies, especially for accident reporting.

Journey

Setting realistic journey targets for your drivers is an important part of safeguarding their welfare. Properly planning their journey reduces the likelihood of speeding or driver fatigue, while also improving the moral of your employees and reducing the risk of work-related ill health.

Tackling your duty of care obligations

There are a number of ways that a company can tackle professional duty of care when it comes to their drivers; from carrying out continuing education through risk assessments and in-vehicle driver training, to classroom based training courses, e-training and documentation.

While drivers should perform daily checks on their vehicles before each journey, companies should also carry out safety checks on vehicles themselves. This is to ensure that they are serviced and maintained regularly.

Every aspect of this process should be recorded in internal management systems and procedures to ensure that, in the event of an incident or accident, there is a clearly defined and identifiable audit trail available.

Duty of care and grey fleet management

Many companies still allow employees, especially those that do not qualify for a company car, to use their own vehicle on company business and reclaim a mileage allowance.

Such vehicles are typically referred to as ‘grey fleet’ vehicles, this is because although they are not company owned, the company does have a professional duty of care towards them and could still be liable for any accidents or incidents in which the drivers of grey fleet vehicles are involved.

Research has shown that grey fleet vehicles are usually older than company-owned vehicles. In addition, they might not have been serviced as regularly and the condition of the tyres may be in generally poorer condition. Moreover, drivers in many instances might only have social, domestic and pleasure insurance, rather than the necessary cover for business use.

But, if anything happens while such a car is in use on company business, it is the company, as well as the employee driving the vehicle, who can be held liable.

It is certainly in the company’s best interest to ensure its employees only use grey fleet vehicles that are fit for purpose and are regularly serviced, as there is a whole raft of legislation under which a company could be found to be negligible.

At Fuel Card Services, we offer a range of fleet management services that can help you fulfil your duty of care for your fleet. Get in touch today to find out more.