Pentland Brands scraps ‘free fuel’ and saves thousands

Brand management company Pentland Brands withdrew its private fuel benefit in 2011 and introduced a fuel card system.

The organisation behind global brands such as Speedo, Mitre and Berghaus used The Miles Consultancy’s (TMC) system to gather the data it needed to make the change, which resulted in Pentland reducing fuel usage by 16% and cutting thousands of pounds from its fleet budget.

Pentland Brands estimates that withdrawing the private fuel benefit and implementing the TMC fuel and mileage reporting system has delivered an annual cost saving across its fleet of 120 cars.

Steve Osborne, former fleet manager at Pentland Brands, says: “We were operating a fleet where we offered free fuel to our employees, but the increase in the cost of fuel and the hike in national insurance payments meant that our fleet costs were spiralling.

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“We used technologies such as video-conferencing to prevent high business mileage, but employees’ private mileage [bills] were still high because some were commuting long distances to and from work. We concluded that we were not getting any advantage by providing them with free fuel.”

With the help of The Miles Consultancy, Pentland Brands was able to calculate what an employee was paying in tax and how much the organisation was paying for the fuel the individual used.

“It became apparent that we could reduce our costs without any impact to our employees, without the driver being charged for his or her private mileage on a monthly basis,” he says. “So we switched to paying for their business mileage and making the deduction for private mileage from employees’ payroll.

“More people fell into the bracket where they were no better off by taking the benefit, so we had the advantage of introducing a fuel card, deducting private miles directly from source and, because we were no longer paying for their private mileage, it was no longer seen as a benefit in kind, so we didn’t have to pay a national insurance contribution.”