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.vehicleenquiry.service.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.

Source: www.hmrc.gov.uk

Quarterly basis (3 month period)

CO2
band
gm/km

VAT
fuel
scale
charge
(gross)
£

VAT
(20%)
£

VAT
fuel scale charge
(net)
 £

Businesses must use these new VAT fuel scale charges
from the start of their next prescribed accounting period
beginning on or after 1 May 2016 (valid until 30 April 2017)

120 or less

116.00

19.33

96.67

125

175.00

29.17

145.83

130

186.00

31.00

155.00

135

197.00

32.83

164.17

140

209.00

34.83

174.17

145

221.00

36.83

184.17

150

233.00

38.83

194.17

155

245.00

40.83

204.17

160

256.00

42.67

213.33

165

268.00

44.67

223.33

170

279.00

46.50

232.50

175

291.00

48.50

242.59

180

303.00

50.50

252.50

185

314.00

52.33

261.77

190

326.00

54.33

271.67

195

338.00

56.33

281.67

200

350.00

58.33

291.67

205

362.00

60.33

301.67

210

373.00

62.17

310.83

215

384.00

64.00

320.00

220

396.00

66.00

330.00

225 or more

408.00

68.00

340.00

For a car in this CO2 band, if you have spent less than £233 (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 £38.83 to your output tax in box 1 of the VAT form, and add £194.17 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 November 2016. 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.