VAT Recovery On Road Fuel - A Reminder Of The Rules - December 2007
Where a business pays for road fuel which is provided to employees or to the owners of the business either free or below cost, and some of the fuel is used for private motoring in a motor car then scale charges must be accounted for.
The scale charge is based on the CO2 emissions of the vehicle which can be found at the following website: www.smmt.co.uk.
As a concession, HM Revenue & Customs also state that a business does not have to account for the scale charge if they choose to claim no input tax on road fuel, including any which is used in commercial vehicles or solely for business travel in cars. The use of this concession is beneficial where there is less VAT to claim on road fuel than the amount of the scale charge.
Another method of avoiding the scale charge is to keep detailed mileage records to evidence the business use to which the vehicle is put. However, when using this option it is not sufficient to simply estimate a percentage private use, proper mileage records must be kept.
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