Value Added Tax

VAT fuel scale charges

Produced by Tolley
  • 19 Oct 2021 11:21

The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • VAT fuel scale charges
  • What are fuel scale charges?
  • How do you find the appropriate fuel scale charge?
  • How do you calculate the charge due?
  • Example
  • Records

VAT fuel scale charges

What are fuel scale charges?

The VAT fuel scale charge is a simplified method that can be used by a business that funds both business and private mileage costs for employees to account for any output tax due on the private use of the vehicle. The charge was introduced to alleviate the need for businesses to keep detailed mileage records in order to work out how much output VAT to account for on private use. If a business uses the fuel scale charge, then it should be able to recover all of the VAT incurred on the fuel purchased.

How do you find the appropriate fuel scale charge?

A business will need to use the fuel scale charge rates produced by HMRC in order to calculate the amount of VAT that needs to be declared on the VAT return for each car.

It should be noted that the business will need to know the CO2 emissions figure for the vehicle in order to determine the correct fuel scale charge that needs to be applied. If the vehicle was registered after 2001, the CO2 emissions figure will be shown on the vehicle registration document (VC5). Where the CO2 emissions figure is not a multiple of five, the figure is rounded down to the next multiple of five to determine the level of charge. For a bi-fuel vehicle which has two CO2 emissions figures, the lower of the two figures should be used.

For vehicles registered before 2001, it should be possible to obtain the CO2 emissions figure from the Society of Motor Manufacturers and Traders Limited website. For cars which are too old to have a CO2 emissions fi

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