HMRC Confirms New VAT Charges for Older Petrol and Diesel Cars

HMRC has confirmed new VAT road fuel scale charges for drivers of older petrol and diesel cars, with rates effective from May 1, 2026 to April 30, 2027.

HM Revenue and Customs (HMRC) has announced updated VAT rates for UK motorists driving older petrol and diesel vehicles. The tax authority introduced revised VAT road fuel scale charges last month on May 1, which will stay in effect until April 30, 2027, affecting thousands of motorists. Road fuel scale charges are fixed sums approved by HMRC that are added to a VAT return to cover private use of fuel in a company vehicle.

These rates, updated annually by HMRC, are calculated based on CO2 emissions and represent fixed amounts regardless of how much private mileage you accumulate. The charges are recorded by entering them in Box 1 of your VAT return. HMRC stated motorists must calculate the appropriate road fuel charge according to their vehicle's CO2 emissions and the duration of their VAT accounting period, which could be one, three or 12 months.

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The rates rise in increments of 5g per kilometre of CO2 emissions, with VAT-inclusive charges spanning from £657 for vehicles producing 120g or less of CO2 per km, up to £2,297 for vehicles emitting 225g/km over a 12-month period. Motorists can record the charges annually, quarterly or monthly.

However, for motorists with older petrol and diesel vehicles lacking a CO2 emissions figure, you will have to determine the CO2 band using your vehicle's engine size instead to calculate the charge. According to ETA Insurance, this will broadly apply to motorists driving vehicles registered prior to 2001.

The insurance company stated: "Motorists who drive cars that were first registered before 2001 are unlikely to be aware of how much CO2 their vehicle emits. A car's V5 document (sometimes referred to as the logbook) details the amount of CO2 the vehicle emits per kilometre, but this is not the case for vehicles registered before March 1, 2001."

Detailing how to calculate the CO2 emissions figure for older vehicles, HMRC said: "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."

Motorists have the option to reclaim VAT in its entirety and settle the road fuel scale charge, reclaim no VAT whatsoever, or monitor the division between business and personal mileage to partially recoup some VAT.

Listed below are the updated VAT road fuel scale charges from May 1, 2026, to April 30, 2027, covering 12-month, three-month and one-month accounting periods, as confirmed by HMRC.