New VAT recovery changes for the 2012-13 tax year

If you run a fleet of private hire cars and issue a vehicle to each of your drivers, it’s likely that your business pays for your company car drivers’ fuel. Of course, if the employee benefits from the car for private use too, benefit in kind tax will have to be paid on that.

Did you know, however, that you may be able to claim back all the VAT on the fuel provided for that vehicle, even if you don’t carefully note exactly how many miles were for business or personal use?

Instead of keeping complicated logs, HMRC recoups the private element back by applying the VAT fuel scale charges which have just been revised for the 2012-13 tax year. The new charges apply to all account periods that begin from May 1, 2012 onwards.

As is the case with company car tax, the fuel scale charges are CO2 emission linked; running in 5g/km bands from 120g/km or less up to 225g/km or more. If a vehicle doesn’t align directly to a band, you can round it down to the one below. Similarly, if you have dual-fuel vehicles on your fleet where two CO2 figures apply, you can use the lower of the two to calculate the VAT road fuel scale charge.

You can account for the VAT either monthly, quarterly or yearly and there are three scale charges, shown below, depending on which method you choose. We spoke to expert account Gary Jacobs at Drivertax to ask about the latest changes. Gary and his team help give tax advice to companies like Tristar who now employ nearly 500 drivers.

“This actually only applies to around 10% of drivers these days, as very few drivers now run through managed companies,” explains Gary. “A large proportion of drivers, who now total around 180,000 in Greater London alone, are now entirely self-employed. Additionally, if the car is left on works premises and only ever used for business mileage, then the full amount of VAT on the fuel can be recovered without the need to consider the fuel scale charges.”

For those who this does apply, however, it may be of value to know how these calculations work and you should consult your company accountant for professional advice if you feel it may apply to your business. For smaller businesses with just a few cars, however, it may be simpler to not account for any of the VAT at all and just use the total amount as a business expense, less the percentage of private use.

 

Road fuel scale charge 2012/13 – 1 month period

C02 band (g/km)

Vat fuel scale charge, 1 month period (£)

Vat on 1 month charge (£)

VAT exclusive 1 month charge (£)

120 or less

 52.00

 8.67

 43.33

125

 78.00

 13.00

 65.00

130

 84.00

 14.00

 70.00

135

 89.00

 14.83

 74.17

140

 94.00

 15.67

78.33

145

99.00

 16.50

 82.50

150

105.00

 17.50

 87.50

155

 110.00

18.33

 91.67

160

 115.00

19.17

95.83

165

 120.00

 20.00

 100.00

170

 126.00

 21.00

 105.00

175

131.00

21.83

 109.17

180

136.00

22.67

113.33

185

141.00

23.50

117.50

190

147.00

 24.50

 122.50

195

 152.00

 25.33

 126.67

200

157.00

26.17

130.83

205

 162.00

27.00

 135.00

210

 168.00

28.00

140.00

215

 173.00

 28.83

144.17

220

 178.00

29.67

 148.33

225 or more

183.00

30.50

 152.50

Road fuel scale charge 2012/13 – 3 month period

C02 band

Vat fuel scale charge, 3 month period (£)

Vat on 3 month charge (£)

VAT exclusive 3 month charge (£)

120 or less

157.00

26.17

130.83

125

236.00

39.33

196.67

130

252.00

42.00

210.00

135

268.00

44.67

223.33

140

283.00

47.17

235.83

145

299.00

49.83

249.17

150

315.00

52.50

262.50

155

331.00

55.17

275.83

160

346.00

57.67

288.33

165

362.00

60.33

301.67

170

378.00

63.00

315.00

175

394.00

65.67

328.33

180

409.00

68.17

340.83

185

425.00

70.83

354.17

190

441.00

73.50

367.50

195

457.00

76.17

380.83

200

472.00

78.67

393.33

205

488.00

81.33

406.67

210

504.00

84.00

420.00

215

520.00

86.67

433.33

220

536.00

89.33

446.67

225 or more

551.00

91.83

459.17

Road fuel scale charge 2012/13 – 12 month period

C02 band

Vat fuel scale charge, 12 month period (£)

Vat on 12 month charge (£)

VAT exclusive 12 month charge (£)

120 or less

665.00

110.83

554.17

125

1000.00

166.67

833.33

130

1065.00

177.50

887.50

135

1135.00

189.17

945.83

140

1200.00

200.00

1000.00

145

1270.00

211.67

1058.33

150

1335.00

222.50

1112.50

155

1400.00

233.33

1167.67

160

1470.00

245.00

1225.00

165

1535.00

255.83

1279.17

170

1600.00

266.67

1333.33

175

1670.00

278.33

1391.67

180

1735.00

289.17

1445.83

185

1800.00

300.00

1500.00

190

1870.00

311.67

1558.33

195

1935.00

322.50

1612.50

200

2000.00

333.33

1666.67

205

2070.00

345.00

1725.00

210

2135.00

355.83

1779.17

215

2200.00

366.67

1833.33

220

2270.00

378.33

1891.67

225 or more

2335.00

389.17

1945.83

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