Company expense cards give staff a way to pay for business costs without using their own money and claiming it back later. You set the limits, see each transaction as it happens and collect receipts at the point of purchase, rather than chasing them at the end of the month.
For a business with several people buying fuel, materials, travel or software, they can save time for everyone and give you a much clearer picture of where money is going.
How they work
Most providers issue physical or virtual cards linked to a central business account. Some are prepaid and topped up by the business, others draw on a credit limit. Each card is assigned to a person, a team or a purpose.
An app lets you set spending limits, restrict cards to certain types of merchant and freeze a card instantly. Cardholders get a prompt after each purchase to photograph the receipt and add a note. Virtual cards can be created for a single supplier or subscription, which makes it easy to cancel one service without affecting others.
The benefits
- No out-of-pocket staff. Employees do not have to fund business costs and wait to be reimbursed.
- Less admin. Fewer expense claim forms to check and fewer reimbursement payments to make.
- Better control. Limits and merchant restrictions are set in advance rather than reviewed after the money is spent.
- Real-time visibility. You can see spending as it happens, by person, team or project.
- Cleaner records. Receipts are attached to transactions straight away, and many cards feed directly into cloud accounting software.
Receipts and VAT
A card statement is not a VAT invoice. To reclaim VAT you still need a valid receipt or invoice from the supplier. That is why receipt capture at the point of purchase matters so much. If receipts are missing, you lose the VAT and the record of what was bought.
Make sure staff know which costs carry VAT you cannot reclaim, such as client entertaining. Those transactions need to be coded correctly, not just accepted because the card went through.
Tax points to watch
Business expenses paid directly by the company, or reimbursed to an employee, are not taxable on the employee where they would have been entitled to a deduction for the cost themselves. Normal travel, subsistence on business trips, tools and materials fall into this category.
Problems arise when a company card is used for private spending. If the business pays an employee's personal bills, that is usually taxable as earnings or a benefit. For directors of a limited company, private spending on a company card normally goes to the director's loan account unless it is dealt with through payroll.
Fuel needs particular care. Paying for fuel used in an employee's own car for private journeys is taxable. For business journeys in their own car, mileage allowance payments of 45p a mile for the first 10,000 business miles are usually simpler than a fuel card. A company car with fuel for private use triggers a car fuel benefit, which is based on £29,200 for 2026/27.
Setting up a sensible policy
A card is only as good as the rules around it. A short written policy should cover:
- who gets a card and what each one is for;
- monthly and per-transaction limits;
- what counts as a business expense and what does not;
- how quickly receipts must be uploaded;
- what happens if a card is used for personal spending by mistake.
Review spending monthly. Look for missing receipts, unusual merchants and transactions that do not fit the cardholder's role.
What to do
- Compare providers on fees, limits, controls and how well they connect to your accounting software.
- Start with the people who currently claim the most expenses.
- Write a one-page spending policy and share it before issuing cards.
- Agree who reviews the transactions and when.
If you would like help linking expense cards to your bookkeeping, book a free call.
