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Road fuel scale charges

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The European Commission has approved the UK’s request to extend until December 2020 its VAT directive derogation allowing UK employers to use HMRC’s road fuel scale charges to account for VAT in respect of private use of company cars.

The UK has for a number of years operated a special scheme of scale charges for businesses to account for non-deductible VAT on fuel expenditure in company cars, based on the engine capacity and fuel type of the car.

By using the scale charge, businesses can recover all the VAT charged on road fuel without having to split mileage between business and private use. The road fuel scale charges are updated every year and the revised charges for each year are applicable from 1 May.

This scheme is authorised by a derogation from the VAT directive. The current derogation expires on 31 December 2018 and the UK applied to the Commission in April 2018 for an extension until 31 December 2020. The Commission notified the UK in June of its intention to approve the extension and has published its proposal for the Council to authorise this decision.


Issue: 1414
Categories: News , Indirect taxes , VAT