Navigating the New VAT Road Fuel Scale Charges

road fuel

Starting 1 May 2024, businesses will need to adjust their VAT accounting for road fuel with the introduction of updated VAT road fuel scale charges. Beavis Morgan is committed to guiding VAT-registered businesses through these changes smoothly and efficiently.

Understanding VAT Road Fuel Scale Charges

VAT road fuel scale charges offer a streamlined method to account for VAT on road fuel utilised for both business and private purposes. This system simplifies the VAT calculation process, eliminating the need to document each fuel purchase individually. Instead, fixed charges are applied according to the vehicle’s type and its CO2 emissions – essentially providing a standardised estimate of the VAT attributable to private usage.

Who Is Affected?

If you are a VAT-registered business purchasing road fuel for mixed use, you will need to apply the new rates from the beginning of your VAT accounting period starting on or after 1 May 2024. For example, if your VAT quarter commences on 1 June, the updated rates should be adopted from that date onwards.

Criteria for Using Scale Charges

Businesses should employ these scale charges under the following conditions:

  • The road fuel is purchased by the business for both business and private use.
  • The vehicle in question is used by the business and has CO2 emissions data available, or the CO2 band is identifiable through engine size if the car is older.

Businesses that solely cover fuel for business purposes or reimburse employees for business mileage are exempt from utilising these scale charges.

Determining CO2 Emissions

The vehicle’s CO2 emissions figure is key to determining the correct scale charge. This information can typically be found in the vehicle’s logbook or UK approval certificate. Alternatively, the DVLA provides an online tool to check these figures.

For vehicles that predate CO2 emission data availability, the scale charge will depend on the engine size.

Accessing the New Scale Charges

The new scale charges and instructions for calculating the charge for your vehicle are available on the HMRC website. You can find the comprehensive list and guidelines here.

How Beavis Morgan Can Help

Calculating and applying VAT road fuel scale charges can be complex. Beavis Morgan is equipped to provide assistance with these calculations and to advise on the necessity of applying these charges to your VAT returns.

In light of these updates, we recommend reviewing your VAT accounting practices to ensure compliance with the new rates. Should you have any enquiries or need clarification regarding these changes, our experts are ready to help.

For personalised guidance or queries about the new VAT road fuel scale charges, please contact your usual Beavis Morgan partner or email Together, we can ensure that your business continues to operate seamlessly through regulatory updates and beyond.