Fuel cards and mileage claims: how they interact

Fuel cards feel like they simplify things — the fuel is paid for, so surely there is nothing to claim. In practice they usually create more record-keeping, not less, because the question stops being "what am I owed" and becomes "what did I use that I should not have".

Your own car, employer's fuel card

If the card pays for fuel in your car, the employer is meeting a cost that is partly personal. That has consequences.

Fuel used on business journeys is a business cost. Fuel used on personal journeys — including your commute — that the employer paid for is a benefit, and it is taxable.

So the split between business and personal mileage stops being about what you can claim and starts being about what you owe. Get the log wrong in the generous direction and you have understated a benefit. That is a worse position than under-claiming.

Company car, fuel card, no reimbursement

If the car belongs to the company and the card pays for all fuel including private use, that is the car fuel benefit, which is a fixed charge based on the car's CO2 figure rather than on how much fuel you actually used.

The catch is that it is fixed. Someone doing very little private mileage can end up taxed as though they did a great deal, which is why some drivers repay the cost of private fuel instead — using Advisory Fuel Rates — to avoid the charge entirely.

Whether repaying beats being taxed is arithmetic, and it depends on your private mileage. You cannot do that arithmetic without a mileage record.

Company car, business fuel only

The cleanest arrangement: the card is used for business fuel, private fuel is repaid or bought separately. Advisory Fuel Rates are the yardstick.

Here the mileage log is the entire basis of the split. Without it there is no defensible line between the two.

The common thread

In every version of this, the fuel card removes the payment but not the question. Somebody still has to know how many of those miles were business, and the only way to know is to have recorded them as they happened.

Milesheet keeps each vehicle separate and records every journey with its own classification, so the business and private split is a number you can produce rather than an estimate you defend.

Sources

• HMRC — Advisory fuel rates
• HMRC — Business travel mileage for employees' own vehicles
• HMRC — Travel, mileage and fuel rates and allowances

General information, not tax advice. Fuel benefit rules are detailed and change: check current guidance before relying on this.