If you drive for work often, fuel cards simplify admin and help reclaim VAT but can trigger tax charges if used personally. For occasional business trips, mileage reclaim is simpler and usually tax-free, making it ideal for sole traders or low-mileage drivers.
If you use your car for work, you’ve probably wondered:
“Should I get a fuel card or just claim back my mileage?”
It’s a fair question, and the answer depends on how your business runs. Below, we’ll break down how each option works, what it means for your tax bill, and which one is more likely to keep money in your pocket.
If you're out on the road often, especially in a company vehicle, a fuel card can make life a lot easier. You cut down the admin, simplify your tax records, and avoid dipping into your own pocket for every fill-up.
Fuel cards are especially useful for businesses with fleets, field teams, or drivers travelling every day. You get a clear record of spend, centralised billing, and the chance to control costs more tightly. In many cases, your business can claim VAT back too, provided the fuel use is strictly for business.
But there's a catch: if there's any personal use, you'll need to repay that cost or face a fuel benefit charge. That’s where mileage reclaim still has the edge for lower-mileage drivers or those using their own car, particularly if you're only travelling occasionally for work.
If simplicity and speed are top priorities, fuel cards often win. If you’re looking to squeeze every last bit of tax efficiency and only drive now and then, mileage reclaim might still be the better shout.
Before you decide, it helps to understand how each option actually works. While they both deal with fuel costs, they handle payment, tax, and admin very differently. Here’s how they work:
Your company pays for all your fuel, business, and personal. You use the card at approved petrol stations, and your fuel spend is tracked. Great for company cars or high-mileage teams. Fuel cards can also offer discounted rates, spend caps, and detailed reporting – ideal if you need control over budgets or want to keep expenses predictable.
You pay for fuel yourself, then claim back a set amount per mile for business trips. It’s based on HMRC rates and is usually tax-free. It’s simple, low-risk, and ideal for sole traders.
Yes, a fuel card can be a taxable benefit if it covers private use.
If your company pays for all your fuel (including weekends, holidays, and commutes), HMRC sees that as a benefit. That means:
You can avoid the fuel benefit charge by:
Mileage reclaim is much simpler and usually tax-free. If you’re using your own car for business travel, you can claim:
This covers everything – fuel, wear and tear, maintenance, the lot.
If you're using a company car, the rules are slightly different. You’ll need to use HMRC’s advisory fuel rates, which are based on your car’s fuel type and engine size. Either way, keep a clear mileage log that shows:
That’s what HMRC expects if they ever check, though for some businesses, especially those with multiple drivers, a fuel card with automated tracking may reduce admin and risk.
Fuel might be the upfront cost, but how you handle the tax side is what really affects your bottom line. Keep the following in mind:
Fuel cards can make it easier to reclaim VAT on fuel, as most providers supply itemised invoices or VAT receipts as standard. This gives you a clearer paper trail come tax time. Just be sure to separate personal and business mileage, as you’ll need to show accurate records if you’re ever asked to justify the claim
Simple to manage, but unless you’re keeping fuel receipts separately, you’re likely to miss out on VAT reclaim – something fuel cards are far better geared for.
Sole traders often use mileage reclaim for its simplicity and minimal tax reporting. That said, if you’re doing higher mileage or want cleaner fuel tracking, a fuel card can still work well with the right setup.
Limited companies can go either way, but if you're paying for fuel through the business, the tax rules get stricter. If you’ve got multiple employees on the road, fuel cards offer a cleaner way to centralise costs. Just make sure you:
If you’re not sure which setup fits your company, speak to your accountant. It’s better to get it right than pay for it later.
If you’re only driving for business occasionally, mileage reclaim is a simple option that avoids tax complications. But if you’re managing a fleet, doing regular trips, or want clearer cost control, fuel cards can give you better oversight and may suit your setup better
Either way, you’ll want:
If you think a fuel card will suit your business, it’s time to find the right one. At InterFuels, we help you choose a fuel card that keeps things simple, saves you money, and avoids tax headaches. Plus, you get great pricing and coverage that suits your routes. Get a fast, no-fuss quote today and see if a business fuel card could work better for you. Start now!