Budget Notes

BN76 VAT: CHANGES IN FUEL SCALE CHARGES

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