The benefits of a fuel card
With increasing pressure on market conditions and the possibility of a new VAT Directive being introduced, UK hauliers are faced with making some key decisions about their fuel management. Rising fuel prices have dominated the news over the last year. In October the price of crude oil hit an all time high. Inevitably this record breaking price for crude oil meant a dramatic rise in the price for diesel, bad news indeed for UK hauliers. On October 19th 2007 the Road Haulage Association’s weekly survey of prices paid for diesel delivered in bulk to haulage depots (net of VAT) rose by 0.83 p/ltr to an average of 83.29p/ltr. The price has now risen by 12% since the start of the year. Diesel accounts for around one third of hauliers’ operating costs, so the increase in diesel market prices has already added 2.7% to operating costs in what is a low-margin sector seeking price stability for itself and its customers. UK fuel duty rates on diesel are 25p/ltr more than in the rest of the EU. As a result, British hauliers face increasing competition in the domestic haulage market from Irish and continental hauliers who never buy fuel in the UK and pay, typically, between £13,000 and £15,000 per articulated lorry per year less in fuel duty. Recent news suggests the possibility of a revised version of the EU VAT Directive that will require businesses to have all fuel-related costs listed on a VAT invoice. This will mean that although some individual employees can continue to make business purchases, in order to demonstrate the fuel is purchased is strictly for business use, all the fuel receipts have to be retained to claim VAT. Fuel transactions ideally need to be made using a purchasing device such as a company credit card or fuel card, in order that they may be recorded. There is an obvious security risk by using a credit card as there are no purchase restrictions or transaction details, whereas with a fuel card items are listed individually on a single VAT approved invoice. There are numerous fuel cards on the market offering a range of benefits. To get the most out of a fuel card you need to find a card that is suited to your size of operation. Network size, pricing, online services, and additional services like dedicated account managers, fleet management reports and the ability to link fuel cards to bulk yard fuel are all key factors that will determine your choice of fuel card. Fuel card invoices detail all transactions for your fleet. Being able to see the time, date, location, price and volume of all your fuel transactions can reveal trends you might never spot when reconciling a pile of individual receipts. Online account management allows you to access your account details 24/7, and includes services like requesting copy invoices, ordering new cards and downloading fleet management reports. These reports can be downloaded to incorporate into your own reporting system. The recent introduction of “smart card” technology offers big benefits in terms of security and card functionality as Chip and PIN becomes the norm for fuel cards. The obvious security benefit with such cards is that the chip cannot be cloned. In addition, the chip can be programmed to a much greater degree than a magnetic strip. This allows for use parameters to be set for each individual card – which gives the user or fleet manager greater control over legitimate card usage and protects against fraudulent drawings. It is also possible to set daily or weekly limits on the volume or value that can be drawn on any individual card and the customer will be notified if that usage is met or exceeded. With so many changes going on in the market, it is essential to evaluate the way you currently purchase fuel. A fuel card isn’t just about saving money on fuel; it is a smart and efficient way to manage your fleet.Oil prices continue to rise
A revised VAT Directive
How can my business comply with this new revision?
What are the benefits of fuel cards?
Card technology continues to develop
