Your time is precious, so cut down on admin with the VAT fuel scale charge

You are the expert in how to run your business, the person with a vision for success and the person with the skills to implement that vision.

But, all too often, you can find your precious time starting to buckle under the weight of admin and compliance tasks. You can find yourself bogged down in paperwork, rather than developing your business.

One particularly onerous requirement for VAT-registered businesses comes with working out the VAT you need to pay back if you use a business car for personal journeys, which can involve maintaining detailed records of your mileage.

The VAT fuel scale charge

Thankfully, HM Revenue & Customs (HMRC) allows you to use the VAT fuel scale charge to quickly work out how much VAT you need to pay back. This is especially helpful where business cars are regularly used for personal travel.

All you have to do is follow this three-step process:

  • Reclaim all your VAT on fuel
  • Calculate the charge
  • Declare it on your VAT return

How can I calculate the charge?

The charge depends on the CO2 emissions of the car and can be applied to either one, three or 12 month accounting periods.

You can check the car’s CO2 emissions by entering your number plate here:

Making things easier still, HMRC has produced an online calculator, which lets you work out the charge in seconds.

You can find the calculator here:

All you need to do then is to declare the figure on your VAT return in the usual way.

What if I only use a business car occasionally?

Because the charge is essentially levied at a flat rate, you could find that it is far higher than the VAT on fuel used for personal journeys should be. You could even find that it exceeds the VAT your business has reclaimed.

One option in these circumstances is simply not to claim back any VAT on your business fuel use, but that will only make sense in a handful of circumstances.

A better option is usually to maintain mileage records and only claim back VAT paid on fuel used for business journeys.

I’d like to know more

We’re here to help. To find out more about the VAT fuel scale charge or any other tax or accountancy matters, please contact us today.