Many businesses provide their employees with company cars for business use, which often includes a fuel card to cover the cost of fuel. However, some businesses also allow their employees to use company cars for personal trips, which can lead to unauthorised fuel expenses that add up quickly.
To avoid this, it is absolutely crucial for your company to have a policy in place to manage private fuel use in company cars effectively.
In this guide, we’ll be giving you some practical tips and best practices for managing private fuel use in company cars, helping you to save money and ensure your company’s resources are being used efficiently.
Research has found that business mileage is the greatest single expense for businesses across the UK, with over 2 million employees making claims for a total of 10 billion business miles every year.
However, according to another study, 89% of these claims were actually inaccurate, costing companies £1.6 billion each year.
What’s more, a worrying 41% of employees believed there was nothing wrong with over-inflating fuel expenses, with 17% even admitting to deliberately inflating expenses for their personal gain- despite it constituting as fraud.
Fortunately, through better management of private fuel use, you can be sure your employees are following the terms of your company vehicle policy.
When it comes to creating your company vehicle policy, it is essential to cover the following topics:
In order to establish where fuel is being used for personal and private journeys, it is important to clearly define what is classed as business mileage and what is classed as personal mileage.
HMRC states that business mileage is any travel employees make ‘wholly and exclusively’ for business purposes, such as:
HMRC also states that ordinary commutes or any sort of private journey don’t constitute business mileage, even if the employee runs a work-related errand along the way.
One way to accurately monitor private fuel use is through vehicle tracking. Advanced vehicle trackers such as Fleetsmart can help you calculate more accurate data about business mileage, so you only have to pay for fuel used for business trips.
By using vehicle tracking rather than estimating and setting clear lines between private and work-related journeys, your business could be cutting fuel costs by up to 20% every month.
At Fleetsmart, our vehicle tracking devices can help you to manage private fuel use in company cars thanks to our advanced GPS system, which monitors a whole host of data, such as location, start/stops, idling, speeding and much more.
What’s more, we also offer optional add-ons to make it easier to differentiate between business use and private use. For example, our driver privacy switches allow drivers to turn off the tracking when they are using the company car for private journeys.
This also helps you to comply with UK privacy laws, by ensuring you aren’t recording personal data about your employees, which is illegal.
Yes, anyone who uses a company car that is fitted with a tracker must be made aware and consent to being tracked for business purposes under UK tracking laws.
For more information and advice about Fleetsmart’s advanced vehicle trackers, get in touch with our friendly team today.