COMPANIES are recognising the benefits of using fuel cards even when they do not offer employees the benefit of free fuel for private mileage.

The Government has actively discouraged the offer of free fuel in the past few years and now employees pay tax on a whopping £14,400 for receiving it.

But according to latest research, fewer companies are automatically scrapping fuel cards when they remove free fuel.

Mike Waters, head of market analysis at leasing and fleet management company Arval, said: ‘Fuel price volatility has highlighted the benefits of fuel cards as a cost management tool, compared to pay and reclaim, irrespective of a company’s employee benefit policy.

‘Consequently, more companies are retaining fuel cards when withdrawing free fuel as a benefit. The proportion of drivers receiving free fuel and holding a fuel card dropped 3% among fleets last year, with large fleets the quickest to drop the benefit. Just 12% of drivers in 500-plus vehicle fleets now receive the benefit.

Arval’s research also highlighted that only 51% of companies have a written fuel policy and a growing number are incentivising drivers to be more efficient in their use of fuel.