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Topical Tips
115
April
2008 |
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In Topical
Tips 103 we reported on a change to VAT fuel scale charges effective
1 May 2007. This linked the VAT charge for businesses that recover VAT on fuel
used for private motoring to the CO2 emissions of each car.
For VAT periods starting on or after 1 May 2008 a
new set of scale charges must now be applied. Changes
include:
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CO2 banding now as low as 120 g/km (previously the
lowest band was 140 g/km)
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A general increase in VAT scale charges (no
surprise there!)
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For vehicles registered after 2001, the CO2
emissions figure appears on the Vehicle Registration Certificate (VC5). For
vehicles registered between 1997 and 2001 the information can be obtained from
The Society of Motor Manufacturers and Traders Limited
website. In addition, the Vehicle Certification Agency Car Fuel Data
website can be used to search for specific cars. Further historical
information is available at
The Vehicle Certification Agency.
For vehicles that do not have a CO2 emissions
figure, the CO2 band is based on engine cylinder capacity.
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1,400cc or less: use CO2 band
140
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Exceeds 1,400cc but does not exceed 2,000cc: use
CO2 band 175
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Exceeds 2,000cc: use CO2 band 240 or
above
Note that the bands above have not changed despite
the new lower bands in the scale charged. |
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Ensure that you adopt the new VAT
fuel scale charge as soon as is applicable this is usually the first
thing a VAT Inspector will check during a VAT inspection.
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For any vehicles that have no
private use (e.g. a pool car) it is essential that there is evidence to support
this contention.
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If a car is changed during a tax
period and the new car is in a different category, then the VAT should be
accounted for by apportioning the scale charges for the two categories.
Alternatively, to keep it simple, the higher of the scales can be
used.
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If an incorrect rate has
inadvertently been used, then a correction should be made on the next VAT
return. However, if the cumulative error comes to more that £2,000 of VAT
then a special declaration to HMRC must be made
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If it is wished to claim the VAT
on all business fuel paid for by an employee and reclaimed from the company,
then the company must have specific evidence of the VAT incurred by the
employee – see Topical
Tips 77
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Topical Tips is designed to be a
simple and useful source of ideas and information for clients and contacts of
Barnes Roffe LLP. If you are unsure about the implications of any idea
contained therein please contact your Barnes Roffe LLP partner. Barnes
Roffe LLP cannot take responsibility if the ideas are implemented without its
involvement. |
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