Fleet News

Pay-and-reclaim fuel method on the decrease

AN increasing number of fleets are ditching the pay-and-reclaim method of reimbursing business mileage, a new survey suggests.

It is claimed that pay-and-reclaim declined by five percentage points in 2005 and is now the chosen method for only a third of fleets.

Factors for this are high and volatile fuel prices and uncertainty surrounding new rules concerning the European Sixth Directive, which state that companies can reclaim VAT on fuel bought by their drivers providing they have a VAT receipt for every fill-up.

The results come from a survey carried out among 430 UK companies representing 100,000 cars by fleet and fuel management company Arval. It shows that fleets are also increasingly promoting more fuel-efficient driving, with a quarter introducing driver training as a way of encouraging better fuel consumption.

Mike Waters, head of market analysis at Arval, said: ‘These results demonstrate that fuel management is on the increase in UK fleets and that pay-and-reclaim is now in long-term decline, as the benefits of using more effective management systems, such as fuel cards, become ever more widely accepted.

‘It is also significant that consistently high and volatile fuel prices are encouraging fleets to put in place written fuel policies to encourage their drivers to plan their fuel purchases and abandon the culture of distress purchasing.

‘We anticipate that both of these trends will continue in 2006 and that pro-active fuel management will become a prerequisite for any well- managed vehicle fleet in the future.’

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