HM Revenue and Customs (HMRC) has confirmed new VAT rates for UK drivers of older petrol and diesel cars, with the updated road fuel scale charges in force until April 30, 2027. The charges, which took effect on May 1, 2026, apply to vehicles based on their CO2 emissions and are designed to account for the private use of fuel in business vehicles.
How the charges work
Road fuel scale charges are fixed amounts set by HMRC that must be included in Box 1 of a VAT return. These amounts are determined by the vehicle's CO2 emissions and the length of the accounting period, which can be one, three, or twelve months. The charges are updated annually and apply regardless of the actual private mileage driven.
For vehicles without a CO2 emissions figure, typically those registered before 2001, drivers must use the engine size to determine the appropriate CO2 band. According to HMRC, if the cylinder capacity is 1,400cc or less, the CO2 band is 140; if it is more than 1,400cc but less than 2,000cc, the band is 175; and if it is more than 2,000cc, the band is 225 or more.
Charges and rates
The rates increase in bands of 5g per kilometre of CO2 emissions. For a 12-month period, charges range from £657 for vehicles emitting 120g/km or less to £2,297 for those emitting 225g/km or more. Drivers can choose to recover the VAT in full, not recover any VAT, or partially recover VAT based on business mileage.
ETA Insurance notes that drivers of cars registered before 2001 may not know their vehicle's CO2 emissions, as the V5 document does not list this for vehicles registered before March 1, 2001. In such cases, the engine size method should be used.
