The cost of not using fuel cards

There are many hidden costs in the process of buying business fuel, but fuel cards can help solve that, providing control, convenience and financial benefits.

Controlling fuel purchases and putting in place accurate claims processes, while ensuring that GST (Goods and Services Tax) reclamation is both efficient and error-free, are issues many businesses face.

But with fuel cards, such as CardSmart, you can help resolve these problems.

Claiming GST back: what’s at stake

To reclaim the correct amount of GST, drivers must maintain accurate records. GST-registered businesses can reclaim the GST on fuel purchases if the vehicle is used exclusively for business purposes. This is crucial, as the GST rate on fuel is 10%.

How much can be reclaimed? For example, let’s consider a van driver who travels 30,000 km annually, purchasing diesel at an average price of $1.80 NZD per litre, achieving 10 km per litre. That results in a total fuel cost of $5,400 NZD, of which $490.91 NZD (10%) can be reclaimed as GST. When this is multiplied across a fleet of 10, 100, or 1,000 vehicles, the potential GST recovery becomes substantial.It is essential to keep every receipt to avoid losses. For example, in a fleet of 100 vehicles, if 10% of receipts are lost, it could mean a loss of up to $54,000 NZD, including $10,800 NZD in missed GST claims. This highlights the importance of capturing every receipt. Fuel cards can prevent this by automatically managing and recording purchases.

Admin: The unseen cost

The time spent on administrative tasks associated with fuel receipts can quickly add up. For example, it’s not uncommon for each driver to spend around 30 minutes a month submitting fuel expense forms. If a driver’s time costs $30 NZD an hour, that could be $180 NZD per driver annually, or $18,000 NZD for 100 drivers, just to process fuel expenses.

Is the process different for electric vehicles?

Yes, but the principles remain similar. Electricity purchased for EVs at public charging stations is subject to GST at 10%, and businesses can claim this back. However, if charging occurs at home, a reduced rate of GST might apply depending on the electricity tariff.

Tracking and managing these different charging scenarios may require a separate system, and this is where CardSmart +Electric, makes it easier for businesses to manage EV charging expenses.

The convenient way to find fuel, or chargers

While fuel cards can save administrative time, they also provide convenience for the driver, helping save working hours spent searching for fuel stations, electric chargers, or maintenance and repair services. CardSmart’s extensive fuel network covers 90% of New Zealand, and over 300 electric charging points nationwide, so drivers should not have to travel far to refuel or recharge. In addition, CardSmart offers access to roadside assistance, ensuring smooth and efficient journeys with minimal disruptions.

The solution: buying fuel better and streamlining admin

The scenarios above illustrate the challenges many businesses face in managing fuel receipts and the time required for administration. With fuel cards, receipts are easily managed in one place, with access 24/7 through an online portal.

Automatic, GST-compliant invoices are generated, eliminating the risk of lost receipts and helping to avoid where potential GST claims are missed. Moreover, simple online authorisation processes reduce the time spent on admin, cutting down costs.

In addition to saving time and money, fuel cards offer the convenience of access to thousands of fuel stations, electric charging points, maintenance and repair services, as well as tolls and roadside assistance across New Zealand. This allows your drivers to focus on their tasks, rather than spending valuable time searching for refuelling options or dealing with unexpected issues on the road.

When you factor in productivity gains, reduced hidden costs, and the potential loss of unclaimed GST, it’s clear that fuel cards are a great tool for businesses looking to save time and money in managing fuel expenses.