VAT fuel scale charges: choose the method before claiming the fuel
Suppose a company pays for all the fuel in a car that is also used privately. The fuel invoices show VAT, but the bookkeeper cannot simply claim it all and move on. The business first needs a road-fuel VAT method. If it chooses scale charges, it then matches each affected car to the correct CO2 band and the table for that accounting period.
Choose the method for the whole business
Where a business funds fuel for both business and private motoring, VAT Notice 700/64 sets out the three options below. Charging for private fuel has separate rules, and partial exemption or non-business restrictions still apply.
The choice reaches further than one car. Opting for scale charges covers every car in which business fuel is available for private use, while a car not available for private use needs no scale charge. The no-claim option is wider still because it covers all road fuel the business buys, including fuel for commercial vehicles.
| Option | VAT treatment | Main requirement |
|---|---|---|
| Scale charge | Claim fuel VAT and account for output VAT by CO2 band | Apply it to all cars with business fuel available for private use |
| Business fuel only | Claim VAT on business fuel only | Keep detailed mileage records |
| No road-fuel claim | Claim no input VAT on road fuel | Apply it to all road fuel, including commercial vehicles |
Sources and context, checked :
Find the right scale charge
Three details identify the figure: the table in force for the period, the period length of one, three or twelve months, and the car's CO2 band. Round emissions down to the next multiple of five, so a car at 153 g/km uses band 150. Use the lower figure for a bi-fuel car.
HMRC's 2026 scales apply from the start of the next prescribed accounting period beginning on or after 1 May 2026. A quarter that began on 1 April 2026 therefore stays on the earlier table. The published quarterly figures for band 150 are shown here.
| HMRC quarterly figure, CO2 band 150 | Amount |
|---|---|
| VAT-inclusive scale charge | £328.00 |
| Output VAT | £54.67 |
| VAT-exclusive scale charge | £273.33 |
A hypothetical quarter
Assume a fully taxable business has one band 150 car available for private use from 1 July to 30 September 2026. It buys £900 of fuel including 20% VAT, holds valid VAT invoices, and has no other cars or restrictions.
Fuel input VAT is £900 ÷ 6 = £150. After deducting HMRC's published £54.67 output VAT, net fuel VAT recovery is £95.33. Posting the full £328 as output VAT would be wrong because that figure includes VAT, and it would turn the £95.33 recovery into a £178 cost.
The scale charge can also exceed the VAT claimed. If the same business bought £240 of fuel, input VAT would be £40, which is £14.67 below the scale charge. Compare the methods before claiming.
Keep the workings with the return
If a car is replaced by one in a different band, apportion the charge or use the higher scale. Other shorter periods of use may also need apportionment. Advisory fuel rates and employer benefit-in-kind rules do not replace VAT scale charges, and electricity for charging has separate guidance.
- Record the business-wide method decision.
- Keep a vehicle schedule showing the number of cars, CO2 bands, cylinder capacity where needed and dates of any changes.
- File the official table for the period with the fuel VAT invoices.
- Record fuel input VAT and private-use output VAT separately.
Sources and context, checked :