Who is likely to be affected?
1. Businesses which recover input tax on fuel used for private motoring.
General description of the measure
2. This measure will amend the VAT scale charges for taxing private use of road fuel, to reflect changes in fuel prices. It will also amend the table of CO 2 bands to maintain alignment with those used for direct tax purposes.
Operative date
3. The scale charges will be amended by secondary legislation which will come into force on 1 May 2008. Businesses must use the new scale charges from the start of their next prescribed accounting period beginning on or after 1 May 2008.
Current law and proposed revisions
4. The scale charges are set out in Table A in Section 57(3) of the Value Added Tax Act 1994. Secondary legislation will be laid before Parliament in March to replace the current table with a new table to reflect the changes to the scale charges.
5. The table below shows the revised scale charges and output tax payable in each accounting period, depending whether it is a 12 month, 3 month or 1 month accounting period.
6. VAT fuel scale charges for 12 month periods:
| CO2 band, g/km | VAT fuel scale charge, 12 month period, £ | VAT on 12 month charge, £ | VAT exclusive 12 month charge, £ |
| 120 or less | 555.00 | 82.66 | 472.34 |
| 125 | 830.00 | 123.62 | 706.38 |
| 130 | 830.00 | 123.62 | 706.38 |
| 135 | 830.00 | 123.62 | 706.38 |
| 140 | 885.00 | 131.81 | 753.19 |
| 145 | 940.00 | 140.00 | 800.00 |
| 150 | 995.00 | 148.19 | 846.81 |
| 155 | 1,050.00 | 156.38 | 893.62 |
| 160 | 1,105.00 | 164.57 | 940.43 |
| 165 | 1,160.00 | 172.77 | 987.23 |
| 170 | 1,215.00 | 180.96 | 1,034.04 |
| 175 | 1,270.00 | 189.15 | 1,080.85 |
| 180 | 1,325.00 | 197.34 | 1,127.66 |
| 185 | 1,380.00 | 205.53 | 1,174.47 |
| 190 | 1,435.00 | 213.72 | 1,221.28 |
| 195 | 1,490.00 | 221.91 | 1,268.09 |
| 200 | 1,545.00 | 230.11 | 1,314.89 |
| 205 | 1,605.00 | 239.04 | 1,365.96 |
| 210 | 1,660.00 | 247.23 | 1,412.77 |
| 215 | 1,715.00 | 255.43 | 1,459.57 |
| 220 | 1,770.00 | 263.62 | 1,506.38 |
| 225 | 1,825.00 | 271.81 | 1,553.19 |
| 230 | 1,880.00 | 280.00 | 1,600.00 |
| 235 or more | 1,935.00 | 288.19 | 1,646.81 |
7. VAT fuel scale charges for 3 month periods:
| CO2 band, g/km | VAT fuel scale charge, 3 month period, £ | VAT on 3 month charge, £ | VAT exclusive 3 month charge, £ |
| 120 or less | 138.00 | 20.55 | 117.45 |
| 125 | 207.00 | 30.83 | 176.17 |
| 130 | 207.00 | 30.83 | 176.17 |
| 135 | 207.00 | 30.83 | 176.17 |
| 140 | 221.00 | 32.91 | 188.09 |
| 145 | 234.00 | 34.85 | 199.15 |
| 150 | 248.00 | 36.94 | 211.06 |
| 155 | 262.00 | 39.02 | 222.98 |
| 160 | 276.00 | 41.11 | 234.89 |
| 165 | 290.00 | 43.19 | 246.81 |
| 170 | 303.00 | 45.13 | 257.87 |
| 175 | 317.00 | 47.21 | 269.79 |
| 180 | 331.00 | 49.30 | 281.70 |
| 185 | 345.00 | 51.38 | 293.62 |
| 190 | 359.00 | 53.47 | 305.53 |
| 195 | 373.00 | 55.55 | 317.45 |
| 200 | 386.00 | 57.49 | 328.51 |
| 205 | 400.00 | 59.57 | 340.43 |
| 210 | 414.00 | 61.66 | 352.34 |
| 215 | 428.00 | 63.74 | 364.26 |
| 220 | 442.00 | 65.83 | 376.17 |
| 225 | 455.00 | 67.77 | 387.23 |
| 230 | 469.00 | 69.85 | 399.15 |
| 235 or more | 483.00 | 71.94 | 411.06 |
8. VAT fuel scale charges for 1 month periods:
| CO2 band, g/km | VAT fuel scale | VAT on 1 month | VAT exclusive 1 |
| 120 or less | 46.00 | 6.85 | 39.15 |
| 125 | 69.00 | 10.28 | 58.72 |
| 130 | 69.00 | 10.28 | 58.72 |
| 135 | 69.00 | 10.28 | 58.72 |
| 140 | 73.00 | 10.87 | 62.13 |
| 145 | 78.00 | 11.62 | 66.38 |
| 150 | 82.00 | 12.21 | 69.79 |
| 155 | 87.00 | 12.96 | 74.04 |
| 160 | 92.00 | 13.70 | 78.30 |
| 165 | 96.00 | 14.30 | 81.70 |
| 170 | 101.00 | 15.04 | 85.96 |
| 175 | 105.00 | 15.64 | 89.36 |
| 180 | 110.00 | 16.38 | 93.62 |
| 185 | 115.00 | 17.13 | 97.87 |
| 185 | 115.00 | 17.13 | 97.87 |
| 190 | 119.00 | 17.72 | 101.28 |
| 195 | 124.00 | 18.47 | 105.53 |
| 200 | 128.00 | 19.06 | 108.94 |
| 205 | 133.00 | 19.81 | 113.19 |
| 210 | 138.00 | 20.55 | 117.45 |
| 215 | 142.00 | 21.15 | 120.85 |
| 220 | 147.00 | 21.89 | 125.11 |
| 225 | 151.00 | 22.49 | 128.51 |
| 230 | 156.00 | 23.23 | 132.77 |
| 235 or more | 161.00 | 23.98 | 137.02 |
9. The scale charge for a particular vehicle is determined by its CO2 emissions figure. Where the CO2 emissions figure of a vehicle is not a multiple of five, the figure is rounded down to the next multiple of five to determine the level of charge. 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 HM Revenue & Customs (HMRC) have prescribed a level of emissions by reference to the vehicle's engine capacity (cc).
10. An update to Notice 700/64 VAT: Motoring Expenses, including the revised figures for all categories of vehicle, will be available from the National Advice Service in due course.
Further advice
11. If you have any questions about this change, please contact the National Advice Service on 0845 010 9000. Information about Budget measures is available on the HM Revenue & Customs website at www.hmrc.gov.uk