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VAT scale charges on road fuel: informal consultation

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HMRC has invited comments by 20 July on changes to bring VAT law on deemed supplies of road fuel used in private travel into line with EU rules, and invited claims to repayment of VAT overpaid as a result of a defect in the current legislation.

The UK’s system of road fuel scale charges is designed to help businesses account for VAT when business road fuel is put to private use, HMRC said in Revenue & Customs Brief 11/12 published last week.

The government said at Budget 2012 that, subject to consultation, it would bring long standing concessions into law and withdraw a concession relating to partially exempt businesses. A technical note, VAT: Road Fuel Scale Charges – changing UK law to comply with EU law and streamlining the scheme, sets out the planned changes.

HMRC said it recognised that there was a defect in the current law and that where a business makes a charge for the private use of fuel, the business should be given the option of accounting for VAT on the basis of the amount charged to the employee.

‘Businesses making a charge for private use of fuel may, until the defect has been corrected, account for VAT on this basis in future returns. Any businesses who consider that they have overpaid VAT as a result of this defect may submit a claim for repayment of the difference between the amount already accounted for and the amount due on the basis of the charge to the employee.’

HM Treasury updated its tax consultation tracker on 27 April.