Fuel reimbursement: Payback time

Questions you should be asking...

• Do we record all business mileage claims plus each car’s total annual mileage (to deduce private mileage)?
• Do we make sure that claimed mileages and fuel costs are routinely checked and, if necessary, queried with the driver? How would we prove it in the event of a tax investigation?
• If we don’t use fuel cards, how do we know how much fuel each driver uses and what it costs?
• Do we know the tell-tale signs of fuel expense fiddling?
• Are our pence-per-mile rates fair? To the business? To drivers?
• If some commuting journeys are chargeable as business mileage (which is common in industries like construction), is this being recorded properly and are time limits being observed?
• Would we be better off
• incentivising drivers to buy fuel at supermarkets or trying to get a rebate from a fuel company? If we try the latter, how do they set the price they rebate against and would we have to commit to buying a certain amount of fuel to qualify? How far out of their way would drivers have to travel to fill up with the cheapest brand of fuel?
• Are we maximising our VAT reclaim (which requires provision of individual till receipts to HMRC unless the company uses a VAT-approved fuel card service)?
• How efficient is our process for paying expenses? Do finance and payroll have to wade through paperwork each month or do we get a payroll-ready data file from our fuel card and/or mileage capture supplier?
• How easy is it for finance/payroll to collate fuel expense and mileage data at year-end for P11D reporting?

Fuel tips

• Fleets can take a variety of actions to reduce fuel costs. Here’s the best.
• Downsizing car/van size and engine size.
• Pool vehicles rather than one vans for each driver.
• Crew buses to pick up/drop off workers rather than each one driving a vehicle to the site.
• Have suppliers deliver goods
• to a site rather than drivers; enables downsizing, removal of racks.
• Use wholelife cost in life to address ongoing fuel impact.
• Bonus service managers to hit fuel cost reduction targets.
• Use phone and video conferencing instead of vehicles.
• Create a travel plan and a hierarchy to reduce journeys.
• Implement a carbon cap and incentivise drivers to choose fuel efficient vehicles.
• Consider speed or rev limiters on your vans.

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