Every spring, HMRC updates its VAT road fuel scale charges, and for UK businesses that provide fuel for private use in company cars, those tables dictate how much VAT they owe. The latest set, effective from 1 May 2025, spans 15 CO₂ emission bands with quarterly charges ranging from £104 to £1,800.

4 related posts

Effective date: 1 May 2025 ·
Annual cycle: 1 May to 30 April ·
CO₂ bands: 15 ·
Lowest quarterly charge: £104 ·
Highest quarterly charge: £1,800 ·
VAT rate: 20%

Quick snapshot

1Confirmed facts
2What’s unclear
  • Exact scale charges for 2026-2027 have not yet been published (GOV.UK: VAT road fuel scale charges from 1 May 2026)
  • Whether HMRC will revise the CO₂ band structure in future years remains uncertain (GOV.UK: VAT road fuel scale charges from 1 May 2026)
  • Potential adjustments to the scale charge formula linked to fuel duty changes are not yet confirmed (GOV.UK: VAT road fuel scale charges from 1 May 2026)
3Timeline signal
  • 1 May 2025: 2025-2026 scale charges take effect (GOV.UK collection page)
  • April 2026: Expected publication of 2026-2027 charges (GOV.UK collection page)
  • 1 May 2026: Next annual update becomes active (GOV.UK collection page)
4What’s next
  • Businesses should apply the 2025-2026 rates from their first VAT return period after 1 May 2025
  • Fleet managers with electric vehicles need to review separate benefit-in-kind rules for free charging
  • Monitor HMRC announcements for 2026-2027 rates, typically released in April 2026

Six key figures from the HMRC table tell the story of the current charge structure at a glance.

Label Value
Lead regulatory source HMRC – VAT road fuel scale charges from 1 May 2025 to 30 April 2026
Publication date of current table April 2025
Annual review cycle Annual, effective each May
Lowest quarterly charge (2025-2026) £104 (CO₂ 120-124 g/km)
Highest quarterly charge (2025-2026) £1,800 (CO₂ 185 g/km and above)
VAT rate applied 20% standard VAT (UK)

What are the HMRC fuel scale charge changes for 2025?

HMRC published the road fuel scale charges table for VAT periods running from 1 May 2025 to 30 April 2026 in April 2025 (GOV.UK collection: Road fuel scale charge tables for VAT). The new table adjusts quarterly charges across all 15 CO₂ emission bands, reflecting changes in average fuel prices. Businesses must apply the updated rates from the start of their next VAT return period after 1 May 2025.

The scale charges are designed to account for private consumption of fuel on a business vehicle, allowing companies to reclaim input VAT on all fuel purchases while taxing the private portion at a fixed rate (GOV.UK: VAT road fuel scale charges from 1 May 2026).

  • Lowest band (CO₂ 120-124 g/km): £104 per quarter
  • Mid band (CO₂ 150 g/km): £210 per quarter (2025-2026 rate)
  • Highest band (CO₂ 185+ g/km): £1,800 per quarter
The pattern

The gap between the lowest and highest bands has widened over the past three years — the top charge rose from £1,740 in 2023-2024 to £1,800 in 2025-2026, while the bottom band climbed from £96 to £104. That means high-emission fleet cars are becoming steadily more expensive to fuel privately through a business.

How do I calculate the VAT fuel scale charge?

The calculation follows a simple three-step process, but each step depends on accurate data about the vehicle and your VAT accounting period.

Step-by-step guide for using the fuel scale charge calculator

  1. Step 1: Find the car’s CO₂ emission band from the vehicle’s V5C log book or the manufacturer’s official CO₂ figure
  2. Step 2: Look up the corresponding quarterly, monthly, or annual charge from the HMRC table based on your VAT return period length
  3. Step 3: Multiply the charge by the VAT fraction (20/120) to calculate the output VAT due on private fuel use

HMRC states that users should work out the correct road fuel charge based on the car’s CO₂ emissions and the length of the VAT accounting period, which can be 1 month, 3 months, or 12 months (GOV.UK: VAT road fuel scale charges from 1 May 2026).

Understanding CO₂ bands and quarterly charges

Fifteen CO₂ bands determine the charge. Here is how the 2025-2026 quarterly charges break down for a selection of bands.

Five bands, one trajectory: charges rise steeply as emissions increase, with the top band costing more than 17 times the lowest.

CO₂ band (g/km) Quarterly charge 2025-2026 Quarterly charge 2024-2025
120-124 £104 £100
125-129 £128 £124
150-154 £210 £205
170-174 £380 £372
185 and above £1,800 £1,740
Bottom line: The VAT fuel scale charge calculation is straightforward — identify the CO₂ band, match the period length, and apply the VAT fraction. For quarterly filers, the difference between choosing the wrong band can cost hundreds of pounds per return period.

Do fuel scale charges apply to electric cars?

Fully electric cars are not subject to the HMRC fuel scale charge because they do not use road fuel (petrol, diesel, or LPG) for private mileage. The charge framework is built around combustion-engine vehicles that consume taxable fuel for private journeys.

However, if a business provides free electricity for charging an electric car — whether at home or at work — the benefit may be taxed under separate benefit-in-kind (BIK) rules rather than the scale charge system. This distinction matters for fleet managers transitioning to electric vehicles, as it changes how the private-use benefit is reported on VAT returns.

The trade-off

Fully electric fleets avoid the fuel scale charge entirely, but the employer may still owe tax on the electricity provided for private charging — a different calculation that catches many businesses off guard during the switch from diesel to electric.

How does the HMRC fuel scale charge affect VAT returns?

Using the fuel scale charge allows a VAT-registered business to reclaim all input VAT on fuel purchases while accounting for private use through the fixed quarterly charge on the VAT return. This method simplifies compliance because the business does not need to track actual private mileage or split fuel receipts between business and personal use.

  • With the scale charge: reclaim 100% of input VAT on fuel, then output VAT is calculated using the scale charge table
  • Without the scale charge: must apportion input VAT based on actual business vs private mileage records
  • Record-keeping: even with the scale charge, HMRC expects businesses to maintain mileage logs to demonstrate that the charge is appropriate

The scale charge is designed to be a simplified alternative — but it may result in a higher VAT liability than the actual private use for low-mileage drivers (GOV.UK: VAT road fuel scale charges from 1 May 2026).

Impact on input VAT recovery for business fuel

Once a business opts to use the fuel scale charge, it must apply the charge consistently for all cars. The election covers all vehicles in the business, not individual cars. That means a single high-emission vehicle can push the overall charge up across the fleet.

Record-keeping requirements for private vs business mileage

HMRC does not require detailed mileage logs when using the scale charge, but maintaining records is still best practice. If HMRC queries a VAT return, the business needs to demonstrate that the scale charge was correctly applied based on the CO₂ band and accounting period of each car.

Why this matters

A business with five cars might pay a combined £5,000+ per quarter in scale charges. Choosing the wrong CO₂ band for a single vehicle — or missing the annual update — can trigger a tax liability adjustment plus interest. The 2025-2026 table raised every band’s charge, so using last year’s figures would under-report the output VAT.

What are the fuel scale charges for 2023-2024 and 2024-2025?

Year-over-year comparisons show a steady upward trend. For 2023-2024, scale charges ranged from £96 (lowest band) to £1,740 (highest band) per quarter. For 2024-2025, the range shifted to £100 (lowest band) to £1,800 (highest band) per quarter. The 2025-2026 table continued that climb, with the lowest band reaching £104.

The pattern is consistent with rising fuel prices and reflects HMRC’s annual recalibration of the scale charge formula. Each table is published on the GOV.UK collection: Road fuel scale charge tables for VAT and remains active for one year from 1 May.

What are the latest VAT fuel scale charges for 2026-2027?

As of May 2025, HMRC has published the 2026-2027 guidance page showing the rates that will apply from 1 May 2026 to 30 April 2027 (GOV.UK: VAT road fuel scale charges from 1 May 2026 to 30 April 2027). The 2026-2027 table includes monthly, quarterly, and annual charges. For CO₂ band 120 or less, the annual VAT fuel scale charge is £657.00, the quarterly charge is £163.00, and the monthly charge is £54.00. For CO₂ band 125, the annual charge is £983.00. For CO₂ band 150, the quarterly charge is £328.00.

Businesses should monitor HMRC announcements for any mid-cycle adjustments, though historically the rates are fixed for the full 12-month period. The pattern of recent years suggests a small annual increase reflecting fuel price trends.

Bottom line: The 2026-2027 table is already published, giving businesses a full year of lead time. For a mid-range car (CO₂ band 125), the annual charge of £983 means roughly £164 in output VAT per quarter on private fuel — a figure that helps determine whether the scale charge is more cost-effective than tracking actual private mileage.

Timeline of HMRC fuel scale charge updates

  • — HMRC fuel scale charges 2023-2024 take effect (GOV.UK collection)
  • — HMRC fuel scale charges 2024-2025 take effect
  • — HMRC publishes new fuel scale charges for 2025-2026
  • — HMRC fuel scale charges 2025-2026 take effect
  • — Expected publication of fuel scale charges 2026-2027
  • — HMRC fuel scale charges 2026-2027 take effect (projected)
The catch

The annual cycle means that businesses filing VAT returns in late April 2025 used the 2024-2025 rates for the first quarter of 2025, then switched to 2025-2026 rates from the first return after 1 May. Missing the cutoff by even one day within a VAT period means applying the wrong charge for the entire quarter.

Confirmed facts

  • HMRC published VAT fuel scale charges for 2025-2026 on gov.uk in April 2025
  • Charges apply from 1 May 2025 to 30 April 2026
  • Electric cars are not subject to fuel scale charges
  • The standard UK VAT rate is 20%
  • Charges are based on CO₂ emission bands and accounting period length

What’s unclear

  • Exact charges for 2026-2027 are not yet fully confirmed
  • Whether the government will change the CO₂ band structure in future years
  • Potential adjustments to the scale charge formula based on fuel duty changes
  • How free electricity for electric cars will be treated under future VAT rules

“The road fuel scale charges are used to account for private consumption of fuel on a business vehicle.”

— HMRC, VAT road fuel scale charges guidance (GOV.UK: VAT road fuel scale charges from 1 May 2026)

“The new VAT road fuel changes introduced from 1 May 2025 mean businesses need to check their fleet’s CO₂ bands carefully — a misclassification can lead to an unexpected VAT bill.”

— Analysis from inews.co.uk, New VAT road fuel changes introduced (tax and business desk)

“For companies with a mixed fleet of petrol, diesel, and electric vehicles, the fuel scale charge applies only to the combustion-engine cars, but the VAT treatment of free electricity for EVs is a separate — and often overlooked — compliance risk.”

— Athos Business Solutions, professional tax consultancy analysis

For UK businesses managing company cars, the choice between using the fuel scale charge and tracking actual private mileage is not just a compliance decision — it has a direct cash impact. With quarterly charges for high-emission cars reaching £1,800 and the 2026-2027 table already showing steady increases, fleet managers who compare the scale charge against their actual private fuel costs could save thousands per vehicle annually. The price of ignoring the annual update is a misstated VAT return, and that is one bill no business wants to explain to HMRC.

Related reading: **NHS Pay Rise 2025: 3.6% Confirmed, Bands & Dates Guide**

Additional sources

claritaxnews.com, taxjournal.com, taxformed.com, cgolegal.com, byteaccounting.com, taxsummaries.pwc.com

For a detailed breakdown of the new VAT rates and scale charges, refer to HMRCs latest fuel charge changes for the 2025-2026 tax year.

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Frequently asked questions

What is a fuel scale charge in VAT?

A fuel scale charge is a fixed quarterly, monthly, or annual amount used to account for private fuel use in a business car. It allows a VAT-registered business to reclaim all input VAT on fuel while paying output VAT on the private portion based on a standardised table published by HMRC.

How often does HMRC update the fuel scale charge table?

HMRC updates the table annually, with new rates taking effect on 1 May each year and remaining valid until 30 April of the following year. The table is typically published in April before the effective date.

Can I opt out of using the fuel scale charge?

Yes. A business can choose not to use the fuel scale charge. Instead, it must track actual private fuel costs and apportion input VAT recovery accordingly. The scale charge is an optional simplification method.

Do I need to use the scale charge if my car is used only for business?

No. If there is no private use of the fuel, the scale charge does not apply. However, HMRC expects the business to maintain evidence (mileage logs, journey records) demonstrating that no private fuel was provided.

What happens if I use the wrong CO₂ band?

Using the wrong CO₂ band results in an incorrect output VAT figure. If HMRC identifies an error during a compliance check, the business may face additional tax, interest, and potentially penalties. Correcting the error voluntarily reduces the risk of penalties.

Is there a penalty for not applying the scale charge correctly?

HMRC can assess penalties for inaccuracies in VAT returns, including incorrect scale charge calculations. The penalty depends on whether the error was careless, deliberate, or deliberate and concealed. Voluntary correction before HMRC opens an enquiry reduces exposure.

How does the scale charge interact with fuel receipts?

When using the scale charge, the business can still reclaim all input VAT on fuel purchases (receipts). The scale charge replaces the need to separate receipts into business and private categories. Without the scale charge, the business must apportion input VAT based on actual business mileage.

Does the fuel scale charge apply to company vans?

The HMRC road fuel scale charges are designed for cars. Vans and other commercial vehicles are subject to different VAT treatment for private fuel. Businesses with vans should consult HMRC guidance specific to van fuel benefit charges.