VAT registered businesses that provide fuel for private use in cars need to take account of the supplies of fuel they are deemed to be making to the owner, partner or employee of the business.  Alternatively, if reimbursement of fuel for private use is required output VAT needs to be accounted for on reimbursements.

In order to account for the private use of the fuel, businesses have three options:

1. Use the fuel scale charges published by HMRC.  These are standard charges based on the CO2 emissions figure for the make and model of car in which the fuel is used. They are added to the output tax declared on the VAT return.  If fuel scale charges are used the business can claim the VAT on its fuel to the extent that it makes taxable supplies.

2. Claim only the input VAT on fuel used for business journeys.  The fuel scale charges are not applied but the apportionment between business and private use must be accurate, based on reliable business mileage records.

3. By concession, the fuel scale charges are not applied if no VAT is claimed on fuel at all.

The revised fuel scale charges are available on the GOV.UK website.