HM Revenue & Customs (HMRC) has confirmed the updated VAT road fuel scale charges for petrol and diesel cars, which will take effect from May 1, 2026, and remain applicable until April 30, 2027. These charges will impact businesses claiming VAT on fuel for company cars.
According to HMRC, businesses need to calculate the correct VAT road fuel charge based on their vehicle’s CO2 emissions and the length of their VAT accounting period, which can be one, three, or twelve months. The charges differ according to CO2 emission bands, with higher emissions attracting larger scale charges.
For cars registered before March 1, 2001, that may not have a specified CO2 emissions figure, businesses should categorize their vehicles based on engine size:
- Engine capacity of 1,400cc or less: CO2 band 140
- More than 1,400cc but less than 2,000cc: CO2 band 175
- More than 2,000cc: CO2 band 225
READ MORE: Older Drivers Must Meet Vision Standards to Continue Driving, Says Government
READ MORE: Gracechurch Shopping Centre Hosts Two Exciting Events This Weekend in Sutton Coldfield
Businesses will need to apply the proportion of the accounting period during which each vehicle was used to the relevant scale charge to calculate the total amount payable.
Here are some key VAT road fuel scale charges for the 12-month period, with corresponding three-month and one-month rates:
- 125g/km: £983 (12 months) | £246 (3 months) | £81 (1 month)
- 150g/km: £1,314 (12 months) | £328 (3 months) | £109 (1 month)
- 175g/km: £1,640 (12 months) | £409 (3 months) | £136 (1 month)
- 200g/km: £1,971 (12 months) | £492 (3 months) | £163 (1 month)
- 220g/km: £2,233 (12 months) | £557 (3 months) | £185 (1 month)
For vehicles without an emissions band, a basic charge applies:
- £657 (12 months) | £163 (3 months) | £54 (1 month)
Employers and businesses should ensure they update their records and accounting systems to reflect these new charges at the start of the first accounting period beginning on or after May 1, 2026, to remain compliant with HMRC regulations.