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How to make money from your fuel claims

  • Find out how to make the most of fuel claims
  • Important things to remember if you drive your own car for work
  • Tips to drive economically to save fuel

If you drive your own car for business, or run a company car for which you have to pay for your own fuel, you’ll know all about reclaiming business mileage.

There are many options out there to keep track of your fuel expense including fuel cards, online expense forms and good old fashioned pen and paper.

With fuel prices still high and the cost of living always on the up, gaining a few extra pounds or a couple of extra litres of fuel can be a welcome relief.

Here is what you need to know to help get the maximum benefit from reclaiming your business mileage.

You have a company car but pay for the fuel

If you pay for your own fuel and need to reclaim miles travelled for business there are a number of ways your company can choose to do this.

Fuel cards are probably the easiest when it comes to administration time for both you and your fleet manager as this solution clearly shows how much has been spent, the amount of miles covered and your current mpg. A downside, though, is it enables your fleet manager to pay an exact pence-per-mile rate so you won't be reimbursed any more generously than necessary. 

Lots of companies do not use fuel cards and instead have the driver reclaim the amount of fuel through an online expense system.

In this case, Advisory Fuel Rates (AFRs) are set by HM Revenue and Customs (HMRC) with separate rates for different engine sizes and fuel types. Although they are only recommended as a guideline, most companies use them.

To view the latest AFR rates, click here.

By driving as economically as possible you can ensure that the money you claim back not only covers the cost of the fuel but you may also even make a bit of money or gain left over fuel for private use in the process.

You drive your own car for business

Most companies are against you driving your own car for business, mainly because of the resultant duty of care implications and the higher cost to reimburse fuel. Sometimes, though, you won’t travel enough miles each year to warrant a company car or there are no pool vehicles available at your company so there is no other choice.

HMRC sets Approved Mileage Allowance Payments known as AMAPs and most companies use these when asking employees to reclaim business miles. If your company rate is lower you can claim tax relief on the difference.

The current statutory mileage AMAP rates are:

Up to 10,000 miles: 45p per mile
10,000 miles or more: 25p per mile

The rate is the same for all cars, irrespective of engine size and they are higher than the AFR rates for company cars because depreciation, insurance costs and road tax are all taken into account in addition to the fuel costs.

Running a new and small car maximises your fuel economy and keeps running costs low so claiming back at the AMAP rates means you should not only cover your costs, there's a chance you could make a bit of cash too.

Don’t forget that your insurance also needs to have cover for business use and you need to keep up to date with MOT tests and regular servicing that meet the manufacturer and that the car you drive meets any company guidelines on age and CO2 limitations.

Eco Driving Tips

Research suggests that adopting a smoother driving style, keeping to the speed limits, using the right gears and anticipating the road ahead can have a significant impact on average MPG figures. If you want to maximize your fuel claims and get the most out of a full tank, adopting a few of the below tips will help.

  • Slow down -  The faster you go the more fuel you will generally consume.
  • Smoother driving – Avoiding harsh accelerating and braking can help to improve overall fuel consumption by around a third
  • Avoid stop/starting – Stopping and starting constantly will use more fuel. If you slowly approach traffic lights, queues of traffic or crossings, you can read the road further ahead and maybe avoid having to stop which could help to save fuel.
  • Get rid of weight – Unnecessary weight like roof racks or heavy boot loads will increase fuel consumption.
  • Use appropriate gears – Using lower gears when travelling over 40mph will make the engine work harder and use more fuel
  • Don't idle - Always set off as soon as possible, there is no need to wait for the engine to warm up.
  • Check tyre pressures – Driving on under-inflated tyres increase fuel consumption.
  • Turn off equipment – Equipment like heated seats and air-con don't work for free. If they're not needed – turn them off.

Need to calculate your company car tax?

The Parkers Company Car Tax Calculator helps you to work out how much tax you would have to pay for your new company car, broken down into annual and monthly costs for 20, 40 or 45 percent tax payers.

Click here to use the tool.