UK’s war on cars- if the doubletaxes don’t get you, the compliance will
cough up suckers!
Let’s start with a summary from Brave AI:
On 1 May 2026, HMRC implemented new VAT road fuel scale charges for businesses accounting for the private use of fuel in company vehicles, but there was no increase to the standard fuel duty or general VAT rate on pump fuel at that time.
The key changes and rates effective from 1 May 2026 to 30 April 2027 are:
VAT Road Fuel Scale Charges: These annual rates increased slightly compared to the previous period (2025–2026). For example, the charge for vehicles emitting 120g CO2/km or less rose from £654 to £657 for a 12-month period, while the highest band (225g/km or more) increased from £2,268 to £2,297.
Fuel Duty: The rate remained unchanged at 52.95p per litre (reflecting the temporary 5p cut). The planned increase of 1p per litre is not scheduled until 1 September 2026.
Standard VAT: The standard VAT rate on fuel at the pump remained 20%.
Drivers and businesses must use these new scale charges for any VAT accounting period starting on or after 1 May 2026. Let’s dive into the weeds a little – good luck with company cars that are also used privately o varying degrees!
From here:
HMRC confirms new VAT rates for petrol and diesel drivers from May 1
“HM Revenue and Customs (HMRC) has confirmed new VAT rates for petrol and diesel drivers across the UK.
The new VAT road fuel scale charges are effective from May 1, 2026, and will remain in place until April 30, 2027, with thousands of drivers expected to be impacted by the changes.
Road fuel scale charges are a fixed amount approved by HMRC that are added to a VAT return to account for the private consumption of fuel in a business vehicle.
HMRC updates these rates once per year and the charges apply to vehicles based on CO2 emissions.
Drivers have the option of recovering the VAT in full and paying the road fuel scale charge, not recovering any VAT at all, or tracking the split between business and personal mileage to partially recover some VAT.
The rates increase in bands of 5g per kilometre of CO2 emissions, with VAT-inclusive charges ranging from £657 for vehicles emitting 120g or less of CO2 per km, to £2,297 for vehicles emitting 225g/km for a 12-month period.
Drivers can account for the charges on an annual, quarterly or monthly basis.
Easy to figure out, right?
Mybe this explainer o road fuel charges will help, from Brave AI.
“VAT on road fuel in the UK is charged at the standard rate of 20%. This tax is applied to both the underlying wholesale price of the fuel and the fuel duty itself, meaning consumers effectively pay VAT on the duty as well.”
Ohhh!!...The odd bit of double taxation! Small wonder claiming the double tax is important.
Now for the weeds.
Deep breath.
“You’ll need to work out the correct road fuel charge, based on your car’s CO2 emissions, and the length of your VAT accounting period. This will be either one, 3, or 12 months.”
Listed are the new VAT road fuel scale charges from May 1, 2026, to April 30, 2027, for a 12 month, three month and one month accounting period, as confirmed by HMRC:
CO Emissions: 120g/km or less
12 Month Period: £657.00
3 Month Period: £163.00
1 Month Period: £54.00
CO Emissions: 125g/km - 150g/km
125g/km: £983.00 (12 months) | £246.00 (3 months) | £81.00 (1 month)
130g/km: £1,051.00 (12 months) | £261.00 (3 months) | £86.00 (1 month)
135g/km: £1,114.00 (12 months) | £278.00 (3 months) | £92.00 (1 month)
140g/km: £1,182.00 (12 months) | £294.00 (3 months) | £98.00 (1 month)
145g/km: £1,245.00 (12 months) | £311.00 (3 months) | £103.00 (1 month)
150g/km: £1,314.00 (12 months) | £328.00 (3 months) | £109.00 (1 month)
CO Emissions: 155g/km - 180g/km
155g/km: £1,377.00 (12 months) | £344.00 (3 months) | £114.00 (1 month)
160g/km: £1,445.00 (12 months) | £361.00 (3 months) | £119.00 (1 month)
165g/km: £1,508.00 (12 months) | £377.00 (3 months) | £125.00 (1 month)
170g/km: £1,576.00 (12 months) | £393.00 (3 months) | £130.00 (1 month)
175g/km: £1,640.00 (12 months) | £409.00 (3 months) | £136.00 (1 month)
180g/km: £1,708.00 (12 months) | £426.00 (3 months) | £142.00 (1 month)
CO Emissions: 185g/km - 220g/km
185g/km: £1,771.00 (12 months) | £442.00 (3 months) | £146.00 (1 month)
190g/km: £1,839.00 (12 months) | £459.00 (3 months) | £152.00 (1 month)
195g/km: £1,902.00 (12 months) | £475.00 (3 months) | £158.00 (1 month)
200g/km: £1,971.00 (12 months) | £492.00 (3 months | £163.00 (1 month)
205g/km: £2,034.00 (12 months) | £509.00 (3 months) | £169.00 (1 month)
210g/km: £2,102.00 (12 months) | £524.00 (3 months) | £174.00 (1 month)
215g/km: £2,165.00 (12 months) | £541.00 (3 months) | £180.00 (1 month)
220g/km: £2,233.00 (12 months) | £557.00 (3 months) | £185.00 (1 month)
CO Emissions: 225g/km or more
12 Month Period: £2,297.00
3 Month Period: £574.00
1 Month Period: £190.00
For older cars without a CO2 emissions figure, the CO2 band is instead determined by the size of the engine.
MRC explains: “If your car is too old to have a CO2 emissions figure, you should identify the CO2 band based on its engine size. If its cylinder capacity is:
1,400 or less, use CO2 band 140
more than 1,400cc but less than 2,000cc, use CO2 band 175
more than 2,000 cc, use CO2 band 225 or more
To do this, work out how much of the accounting period you used each car for, and record this as a percentage of the accounting period. Apply this percentage to each road fuel scale charge, to get a total figure.”
Imagine the complexity of calculating VAT in a company of a few thousand employees, who use a company car, or a private car for company purposes.
Remember “ Drivers have the option of recovering the VAT in full and paying the road fuel scale charge, not recovering any VAT at all, or tracking the split between business and personal mileage to partially recover some VAT.
‘Recent Estimates: For the 2025–26 period, VAT is forecast to contribute roughly 14.7% of total tax receipts.’
Value Added Tax (VAT) was introduced to the United Kingdom on 1 April 1973.
The tax was established by the Finance Act 1972 as a requirement for the UK to join the European Economic Community (EEC).
Damned EU/EC! VAT should have been abolished following BREXIT.
Sorry for the UK weeds.
Please take a (paid or unpaid) subscription or forward this article to those you think might be interested.
You can also donate via Ko-fi – any amount from three dollars upwards. Ko-fi donations here: