Changes to the VAT Fuel Charge - May 2007

May 2007

The EC has finally agreed the UK's proposal to align the output VAT charge with the benefit in kind charge on the provision of private fuel assessable on the individual. The proposals and legislation were announced in the 2005 Budget and will be implemented from the 1st May 2007.

The output charge is payable by VAT registered businesses which allow their employees to claim all the fuel expenses on their company cars and reclaim VAT on the full amount of fuel purchased without making an adjustment for private use.

The revised fuel scale charges will be calculated on the basis of carbon dioxide emissions.

The new fuel scale charge for a 3 month period is detailed below:

Vat Fuel Scale Charges for 3 Month Periods
CO2 band	VAT fuel scale charge, 3 month period £	VAT on 3 month charge £	VAT exclusive 3 month charge £
140 or below	182.00	27.11	154.89
145	195.00	29.04	165.96
150	207.00	30.83	176.17
155	219.00	32.62	186.38
160	231.00	34.40	196.60
165	243.00	36.19	206.81
170	256.00	38.13	217.87
175	268.00	39.91	228.09
180	280.00	41.70	238.30
185	292.00	43.49	248.51
190	304.00	45.28	258.72
195	317.00	47.21	269.79
200	329.00	49.00	280.00
205	341.00	50.79	290.21
210	353.00	52.27	300.43
215	365.00	54.36	310.64
220	378.00	56.30	321.70
225	390.00	58.09	331.91
230	402.00	59.87	342.13
235	414.00	61.66	352.34
240 or above	426.00	63.45	362.55

For monthly or annual VAT return periods, pro-rate the above charges accordingly.

For information of users: This material is published for the information of clients. It provides only an overview of the regulations in force at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material can be accepted by the authors or the firm.