VAT road fuel charges: potential problems

The ICAEW Tax Faculty has voiced its concern over changing the UK law for VAT road fuel scale charges to comply with EU law.

In April HMRC published a technical note on VAT road fuel charges, which would remove the need for two concessions currently applied in this area.

The Revenue has proposed to enact the existing extra-statutory concession under which, where a business claims a partial recovery of the input tax on road fuel due to partial exemption, the road fuel scale charge can be apportioned to the same extent.

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Comments

VAT Road fuel charges

Vinoo | | Permalink

The recovery of input tax on fuel will depend on the "Partial Exemption Method" used to apportion the input tax.Depending on the useage of the vehicles under "Direct Attribution" if 90% of the road fuel is used towards making taxable supplies then that is the percentage which may be claimable.