Road Fuel Scale Charges (RFSC) – Possible claims for overpaid VAT

Proposed changes to the VAT rules on Road Fuel Scale Charges (RFSC) seeks to correct a defect in existing legislation.

Under existing law, where a business has provided fuel to an employee for their private use and has made a charge for that fuel, they are required to account for VAT on the basis of the RFSC, unless they have accounted for VAT on the basis of detailed records of private mileage or the charge made was at least for the cost of the fuel. HMRC now recognises that there is a defect in this aspect of current law and that, where the business does make a charge for the private use of the fuel, the business should be given the option of accounting for VAT on the basis of the amount charged to the employee.

Any businesses who have overpaid VAT as a result of this defect may submit a claim for repayment to HMRC.

Should you wish to discuss any of the above, or believe you have overpaid VAT as a result of the defect in existing legislation, please contact your usual Barnes Roffe contact person.

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