RCB/13/07 VAT—fuel scale charge; new CO2 basis

Part V16 Forms and other HMRC material

RCB/13/07 VAT—fuel scale charge; new CO2 basis

RCB/13/07 VAT—fuel scale charge; new CO2 basis

Revenue & Customs Brief, Issue 13. 13 February 2007

This Revenue and Customs Brief announces changes to the VAT fuel scale charge. These changes will come in to effect on 1 May 2007 and businesses must use the new scales from the start of their first accounting period beginning on or after this date. We are announcing the change early to allow businesses time to familiarise themselves with the new charges and make any necessary IT system changes.

The existing VAT fuel scale charge, which is based on the engine size and fuel type of a car, will be replaced by a fuel scale charge based solely on the CO2 rating of a car. The new table, which mirrors that used for direct tax purposes, will have 21 bands with 5g/km increments. An outline of the bands is produced at Annex A.

The complete new table, which will be available following Budget 2007 as an amendment to Notice 700/64 “Motoring expenses” (Part V8), will provide business with the actual scale charge for a car within a particular band. Apart from the change

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