Key Takeaways
- HMRC’s VAT road fuel scale charges changed from 1 May 2026 and apply until 30 April 2027.
- The 2026/27 charges are slightly lower than the 2025/26 figures across the CO2 bands, with the lowest band falling from £661 to £657 a year and the highest band from £2,314 to £2,297.
- Fuel scale charges only matter where a business recovers VAT on road fuel and that fuel is also available for private use in a company vehicle.
- The figures are VAT-inclusive, so the output VAT declared on the VAT return is one sixth of the relevant scale charge.
- Electric vehicles do not use the fuel scale charge; HMRC’s advisory electric rates are a separate reimbursement mechanism and should not be confused with VAT scale charges.
HMRC published the 2026/27 VAT road fuel scale charges on 17 April 2026, with the new table taking effect from 1 May 2026. For businesses running company cars, vans used like cars, or mixed-use fleet arrangements, this is a small but important VAT update: the annual, quarterly and monthly charges have changed, and the new figures need to be used from the first VAT period that begins on or after 1 May 2026.
The headline is unusual. Most annual HMRC fuel scale charge updates nudge upwards. The 2026/27 table moves slightly down across the bands compared with the 2025/26 table, reflecting the fuel price assumptions built into the calculation. The saving is not large per vehicle, but using the wrong table still creates a VAT error. For fleets with many assigned cars, the difference can become material enough to notice during a VAT review.
This guide explains what the charge does, who needs to use it, the 2026/27 rates, and the checks finance teams should make before the next VAT return is filed.
What are VAT fuel scale charges?
VAT fuel scale charges are HMRC’s simplified way of accounting for private use of road fuel in company vehicles. If a VAT-registered business reclaims input VAT on fuel and some of that fuel is used privately, the business normally needs a way to repay the VAT relating to the private element.
The strict alternative is to keep detailed records that separate business fuel from private fuel. In practice, that means reliable mileage logs, fuel receipts, vehicle records and a method that can survive an HMRC enquiry. The scale charge offers a shortcut. Instead of splitting every litre of fuel, the business applies a standard charge based on the vehicle’s CO2 emissions band.
The scale charge is not an extra invoice to HMRC. It is an output VAT adjustment on the VAT return. The scale charge itself is VAT-inclusive; the VAT element is one sixth of the listed amount because the UK standard VAT rate is 20%. For example, a £657 annual scale charge contains £109.50 of output VAT.
The charge normally applies per car, per person, for the VAT accounting period in which private fuel is made available. It is not limited to directors or senior employees. If an employee has a company vehicle and the employer pays for fuel that can be used privately, the VAT question needs to be answered.
When the 2026/27 rates apply
The new HMRC table applies from the start of the first prescribed accounting period beginning on or after 1 May 2026. That detail matters because VAT periods do not all start on 1 May.
Monthly VAT filers will usually use the new table from the May 2026 return. A quarterly filer with a VAT quarter starting on 1 May 2026 uses the new scale charge for that quarter. A business whose quarter started on 1 April 2026 normally continues with the previous table for that quarter and switches at the next period beginning after 1 May. Annual accounting users apply the new figures from the next annual period that begins on or after that date.
The practical control is simple: check the start date of the VAT period, not just the date the return is submitted. Returns filed after 1 May may still include periods that began before 1 May.
HMRC’s 2026/27 guidance is published at VAT road fuel scale charges from 1 May 2026 to 30 April 2027. The wider HMRC overview of the mechanism is at fuel scale charge.
What changed from 2025/26?
The 2026/27 table is slightly lower than the 2025/26 table. At the bottom of the table, the annual charge for a car with CO2 emissions of 120 g/km or less is £657, down from £661 in 2025/26. At the top, the annual charge for a car in the 225 g/km or more band is £2,297, down from £2,314.
That is not a strategic tax change or a new relief. It is simply the annual recalculation of the standard charge. Still, it gives finance teams a useful reminder to update VAT return working papers, spreadsheet templates and payroll or fleet notes that feed into VAT compliance.
| CO2 band | 2025/26 annual charge | 2026/27 annual charge | Movement |
|---|---|---|---|
| 120 g/km or less | £661 | £657 | down £4 |
| 140 g/km | £813 | £807 | down £6 |
| 175 g/km | £1,232 | £1,223 | down £9 |
| 200 g/km | £1,691 | £1,679 | down £12 |
| 225 g/km or more | £2,314 | £2,297 | down £17 |
The reductions are modest, but using the 2025/26 table after the change date overstates output VAT. Using the 2026/27 table too early understates it. Neither is a good result if the process is later reviewed.
2026/27 VAT fuel scale charge table
HMRC’s 2026/27 table has 22 CO2 bands. The figures below are VAT-inclusive scale charges for 12-month, three-month and one-month periods.
| CO2 emissions | 12-month charge | 3-month charge | 1-month charge |
|---|---|---|---|
| 120 g/km or less | £657 | £163 | £54 |
| 125 g/km | £697 | £174 | £58 |
| 130 g/km | £738 | £184 | £61 |
| 135 g/km | £779 | £194 | £64 |
| 140 g/km | £807 | £201 | £67 |
| 145 g/km | £848 | £212 | £70 |
| 150 g/km | £889 | £222 | £74 |
| 155 g/km | £929 | £232 | £77 |
| 160 g/km | £970 | £242 | £80 |
| 165 g/km | £1,011 | £252 | £84 |
| 170 g/km | £1,051 | £262 | £87 |
| 175 g/km | £1,223 | £305 | £101 |
| 180 g/km | £1,275 | £318 | £106 |
| 185 g/km | £1,381 | £345 | £115 |
| 190 g/km | £1,487 | £371 | £123 |
| 195 g/km | £1,593 | £398 | £132 |
| 200 g/km | £1,679 | £419 | £139 |
| 205 g/km | £1,785 | £446 | £148 |
| 210 g/km | £1,891 | £472 | £157 |
| 215 g/km | £1,997 | £499 | £166 |
| 220 g/km | £2,103 | £525 | £175 |
| 225 g/km or more | £2,297 | £574 | £190 |
For VAT return purposes, divide the selected scale charge by six to find the output VAT. A quarterly charge of £305 therefore gives output VAT of £50.83. Keep the calculation in the VAT file even if your accounting software posts only the VAT amount; it gives a reviewer a clean trail from vehicle to CO2 band to return entry.
How to find the right CO2 band
Start with the vehicle’s CO2 emissions figure. For most cars, this is shown on the V5C logbook and can also be checked through DVLA vehicle information. If the figure is not a multiple of five, round it down to the nearest multiple of five for the scale charge table.
For dual-fuel cars, HMRC says to use the lower CO2 emissions figure. For older cars without an official CO2 figure, use engine size as the fallback:
- 1,400cc or less: use the 140 g/km band
- 1,401cc to 2,000cc: use the 175 g/km band
- Over 2,000cc: use the 225 g/km or more band
Hybrid vehicles still need to be checked against their CO2 figure. Fully electric vehicles are different because there is no road fuel and no CO2 emissions band for the VAT fuel scale charge.
Worked example
Suppose a VAT-registered importer has a company car with CO2 emissions of 173 g/km. The business pays for all fuel and allows the director to use the car privately. It recovers VAT on fuel purchases and files VAT returns quarterly.
The emissions figure is rounded down to 170 g/km. Under the 2026/27 table, the three-month scale charge is £262. The VAT element is one sixth of £262, which is £43.67. The business adds £43.67 to output VAT on the VAT return for that quarter.
If the car was only available for half the period, the charge should be apportioned. If the car was available for the full period but private use was small, the scale charge still applies in full unless the business chooses to keep adequate actual-use records and restrict fuel VAT instead.
This is why the decision is commercial as well as administrative. For low private mileage, the scale charge can be more expensive than keeping proper mileage records and claiming only the business fuel VAT. For high private mileage, the scale charge may be simpler and predictable.
Fuel scale charges are not advisory fuel rates
Fuel scale charges and HMRC advisory fuel rates are often mixed up, but they solve different problems.
Fuel scale charges deal with VAT on private fuel made available in a company vehicle. They are posted as output VAT and are based on CO2 emissions bands. They sit inside VAT compliance.
Advisory fuel rates deal with mileage reimbursement for company cars, or repayment by employees for private fuel. They are based on fuel type and engine size, and HMRC updates them quarterly. For electric company cars, HMRC’s advisory electric rates are used for mileage reimbursement, including the separate rates for home and public charging from June 2026. Those rates do not create a VAT road fuel scale charge for an EV.
If your process uses one spreadsheet for both VAT and mileage reimbursements, label the tabs clearly. A common error is for an accounts team to update advisory fuel rates but forget the VAT scale charge table, or to treat the advisory electric rate as if it were a VAT scale charge. They are separate HMRC schemes.
Common mistakes to avoid
The first mistake is using the wrong year’s table. Put a diary reminder around April each year and check the start date of the VAT period before switching.
The second is applying the charge to vehicles where the business has not reclaimed VAT on fuel. If no input VAT has been recovered on fuel, the scale charge normally has nothing to correct.
The third is forgetting apportionment. If a car is introduced, withdrawn, unavailable or assigned part-way through a period, the scale charge may need to be apportioned by availability.
The fourth is assuming every low-emission vehicle is outside the rules. A hybrid can still have a CO2 band and can still use road fuel. A fully electric vehicle is different.
The fifth is poor evidence. Keep the vehicle list, CO2 source, period used, scale charge selected and VAT calculation together. This is especially important where finance teams receive fleet data from HR, payroll or operations rather than maintaining the vehicle register themselves.
Businesses that also import vehicles, parts or fuel-related equipment should keep this VAT process separate from border compliance. Customs duty, commodity code classification and import VAT are different calculations from domestic VAT fuel scale charges. For broader customs processes, see our guides to customs clearance, EORI numbers and import duty.
Should you use the scale charge or actual records?
The scale charge is attractive because it is simple. It avoids arguments about every journey and every receipt, and it gives the business a repeatable method for each VAT period. For many owner-managed businesses and small fleets, that administrative saving is the main reason to use it.
But it is not always the cheapest method. If private fuel use is low, the output VAT under the scale charge may exceed the VAT actually recovered on private fuel. In that case, better mileage records and a restricted input VAT claim may produce a fairer result.
The decision should be reviewed whenever the fleet changes, fuel policy changes, private use changes, or electric vehicles replace petrol or diesel cars. Do not let last year’s method run automatically if the facts have moved.
FAQ
When did the 2026/27 VAT fuel scale charges start?
They apply from the first VAT accounting period beginning on or after 1 May 2026. The table runs until 30 April 2027.
Are the HMRC figures VAT-inclusive?
Yes. The published scale charges are VAT-inclusive. Divide the relevant figure by six to calculate the output VAT for a standard-rated VAT return.
What if the CO2 emissions figure is not a multiple of five?
Round it down to the nearest multiple of five, then use that band in HMRC’s table.
Do electric vehicles have a VAT fuel scale charge?
Fully electric vehicles do not use the road fuel scale charge because there is no road fuel and no CO2 emissions band. HMRC advisory electric rates are used for mileage reimbursement, which is a separate process.
Can a business avoid the scale charge?
Yes, if it does not reclaim VAT on private fuel or if it keeps adequate records and restricts input VAT so only business fuel VAT is claimed. The scale charge is a simplification, not the only possible method.