VAT Road Fuel Scale Charges
The new VAT road fuel scale charges have been published. The changes amend the VAT scale charges for taxing private use of road fuel to reflect changes in fuel prices.
The new fuel scale charges must be used by companies from the start of their next prescribed accounting period beginning on or after 1 May 2020. The fuel scale rates continue to encourage the use of cars with low CO2 emissions.
The revalorisation of fuel scale charges is no longer part of the Budget process and the tables are published by HMRC annually.
Where the CO2 emission figure is not a multiple of five, the figure is rounded down to the next multiple of five to determine the level of the charge. For a bi-fuel vehicle which have two CO2 emissions figures, the lower of the two figures should be used. There are special rules for cars which are too old to have a CO2 emissions figure.
HMRC operates a simplification measure that allows businesses to use a standardised scale charge to value private use fuel, saving businesses the need to keep detailed records of actual private mileage. Most businesses, particularly small and medium sized businesses, which do not keep detailed mileage records covering all journeys, use the road fuel scale charges scheme.
In Budget 2012 it was announced that legislation was to be put in place to correct a defect in the rules covering the road fuel scale charges scheme and how VAT is charged on some private fuel provided to an employee.
New legislation which will enable the necessary changes comes into force from 1 February 2014. The legislation will complete the process of updating the UK law on VAT road fuel scale charges. The updated law will not change the current table of charges, which will remain extant until 30 April 2014.