VAT Fuel Sale Charge



I am the sole director of my own company and I regularly use my private car for business journeys, can I reclaim the vat on the fuel purchased.




There are different ways for a business to recover vat on fuel purchased, providing the business is not using The Flat Rate Scheme. The business can either claim back all the vat incurred and pay the correct Vat fuel scale charge or only claim the vat incurred for business use.


If your business chooses to claim all the input vat on the fuel purchased, you will have to account for VAT on any personal use. In order to simplify accounting for vat on the private use of the vehicle you can choose to apply the Vat fuel scale charge.


The scale charge is calculated on the CO2 emissions rating of the car. The CO2 emissions can be found on the log book of the car, you can also check the DVLA website using the details of the car registration number. If the car has no emissions rating the calculation can be based on the engine size. The vat applicable on the scale charge is then added to Box 1 of the vat return, with the net amount of the vat included in the net sale in box 6.


If your business has very low personal use of the car, you may choose not to claim back any of the vat as the fuel scale charge could be greater than the vat you claim.


Alternatively you can choose to only claim the Vat based on the exact business mileage or if your business pays a mileage allowance to employees, you can claim back the vat on the fuel element within this mileage allowance. In either case you will have to keep detailed business mileage records for any mileage incurred, the purpose of the journey and the car details.


Fuel scale charges are amended each year usually in May so you need to check for the current rates on the HMRC website.


The advice above is specific to the facts surrounding the questions posed. Neither PKF-FPM nor the contributors accept any liability for any direct or indirect loss arising from any reliance placed on replies.


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