Updated VAT Fuel Charges

As of 1st May 2024, businesses registered for VAT in the UK will need to adopt updated VAT road fuel scale charges. This change applies to all VAT-registered businesses that use fuel (petrol or diesel) for both business and private purposes.

What are VAT Road Fuel Scale Charges?

VAT road fuel scale charges are designed to simplify the VAT process for businesses that incur fuel expenses used for mixed purposes. This system eliminates the need o records every fuel purchases separately by applying fixed charges.

These charges are based on the vehicle type and its CO2 emissions, providing an estimated VAT on private usage of the vehicle.

When to Start Using the New Rates

The updated rates must be implemented from the start of your next VAT accounting period beginning on or after 1st May 2024. This will be either 1, 3, or 12 months.

For instance: If your VAT quarter starts of 1st June, you will apply the new rates starting from that date. If your next VAT quarter starts of 1st July, you will apply the new rates starting from that date.

Who Needs to Use These Charges

This simplified VAT calculation method is appropriate only if your business pays for fuel that is used for both business and private purposes.

If your company solely covers fuel for business use, or if you reimburse employees for business mileage without covering private fuel usage, you do not need to use these charges.

How to Work Out the Appropriate Charge

Determining the right scale charge involves a few steps:

  1. Identify CO2 Emissions: Check the CO2 emissions of the vehicle. This information can be found in the vehicle’s logbook. Alternatively, you can use the DVLA’s online tool to find this information: Get vehicle information from DVLA – GOV.UK by using your registration plate.
  2. CO2 Band: If the vehicle does not have a specific CO2 emissions figure due to its age, the applicable CO2 band will be determined by the engine size (cc’s).

Finding the Scale Charges

The latest scale charges and detailed instructions on calculating the charge for each vehicle are available online: VAT road fuel scale charges from 1 May 2024 to 30 April 2025.

Updating to the new VAT road fuel scale charges is not just a regulatory requirement but also an opportunity to review and streamline your business’ fuel expense management.

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