VAT: What is the Fuel Scale Charge?

VAT: What is the Fuel Scale Charge?

The VAT Fuel Scale Charge system is a simplified way of taxing the private use of car fuel. So, if you use your vehicle for business and private motoring, you can claim all the VAT on road fuel as long as you apply the appropriate fuel scale charge.

You will need to know the CO2 emissions rating of your car. You can look this up on the DVLA website by entering your registration number and make of vehicle on the Vehicle Enquiry screen at http://www.taxdisc.direct.gov.uk/.

You then need to look up the current fuel scale charge value for your car, either for monthly/three monthly/annual (depending on how often you submit your VAT returns) and add this figure to the output box (box 1) on the VAT form.

If you have low mileage, and therefore low fuel costs, it may not be worth claiming the VAT if the fuel scale charge is more than the VAT you wish to reclaim.

Be aware that the fuel scale charges are amended each year, usually from 1 May, so check for current rates on Cassons for Counsel or the HMRC website.

(Incidentally, you are entitled to reclaim ALL the VAT on your motoring servicing and repair costs!)

Example:

Audi A4, CO2 emissions 154g/Km.

Look at the current table of fuel scale charges, rounding down to the next multiple of 5 for your vehicle.

Value Added Tax (VAT) – Fuel scale charges

 

Businesses must use these new VAT fuel scale charges from the start of their next prescribed accounting period beginning on or after 1 May 2012.

 

CO2 band

VAT fuel scale

charge 3 month

period, £

 

VAT on 3 month

charge, £

 

VAT exclusive 3 month

charge, £

 

120 or less

168.00

28.00

140.00

125

253.00

42.17

210.83

130

269.00

44.83

224.17

135

286.00

47.67

238.33

140

303.00

50.50

252.50

145

320.00

53.33

266.67

150

337.00

56.17

280.83

155

354.00

59.00

295.00

160

371.00

61.83

309.17

165

388.00

64.67

323.33

170

404.00

67.33

336.67

175

421.00

70.17

350.83

180

438.00

73.00

365.00

185

455.00

75.83

379.17

190

472.00

78.67

393.33

195

489.00

81.50

407.50

200

506.00

84.33

421.67

205

523.00

87.17

435.83

210

539.00

89.83

449.17

215

556.00

92.67

463.33

220

573.00

95.50

477.50

225 or more

590.00

98.33

491.67

Source: www.hmrc.gov.uk

For a car in this CO2 band, if you have spent less than £337 (including VAT) on fuel for the quarter, there is no advantage in reclaiming the VAT. However, if you have spent more than this, reclaim the VAT with your other expenses, add £56.17 to your output tax in box 1 of the VAT form, and add £280.83 to your box 6 figure (net sales).

For a bi-fuel vehicle which has two CO2 emissions figures, the lower of the two figures should be used.

For cars which are too old to have a CO2 emissions figure, you should identify the CO2 band based on engine size, as follows:

  • Cylinder capacity 1,400cc or less, use CO2band 140
  • Cylinder capacity exceeds 1,400cc but does not exceed 2,000cc, use CO2band 175
  • Cylinder capacity exceeds 2,000cc, use CO2 band 225

This answer was last checked May 2013.
This answer is for general guidance only. It provides an outline, and may not include points which are important in your case. You should not rely on this answer without taking individual advice based on the full facts of your case. The information given was correct at the time of release.