HM Revenue and Customs (HMRC) has confirmed new VAT rates for UK motorists driving older petrol and diesel vehicles. The revised VAT road fuel scale charges took effect on May 1, 2026, and will remain in place until April 30, 2027, impacting thousands of drivers across the country.
Understanding Road Fuel Scale Charges
Road fuel scale charges are fixed sums approved by HMRC that are added to a VAT return to cover the private use of fuel in a company vehicle. These rates are updated annually and are based on a vehicle's CO2 emissions. The charges are fixed amounts, regardless of how much private mileage is accumulated.
Motorists must record the appropriate charge by entering it in Box 1 of their VAT return. HMRC states that drivers need to calculate the correct road fuel charge based on their vehicle's CO2 emissions and the duration of their VAT accounting period, which can be one, three, or 12 months.
New VAT Rates for 2026-2027
The rates increase in bands of 5g per kilometre of CO2 emissions. For a 12-month period, VAT-inclusive charges range from £657 for vehicles emitting 120g or less of CO2 per km, up to £2,297 for vehicles emitting 225g/km or more. Motorists can account for the charges on an annual, quarterly, or monthly basis.
Rates for Vehicles with CO2 Emissions Data
The following are the new VAT road fuel scale charges from May 1, 2026, to April 30, 2027, as confirmed by HMRC:
- 120g/km or less: £657 (12 months), £163 (3 months), £54 (1 month)
- 125g/km: £983 (12 months), £246 (3 months), £81 (1 month)
- 130g/km: £1,051 (12 months), £261 (3 months), £86 (1 month)
- 135g/km: £1,114 (12 months), £278 (3 months), £92 (1 month)
- 140g/km: £1,182 (12 months), £294 (3 months), £98 (1 month)
- 145g/km: £1,245 (12 months), £311 (3 months), £103 (1 month)
- 150g/km: £1,314 (12 months), £328 (3 months), £109 (1 month)
- 155g/km: £1,377 (12 months), £344 (3 months), £114 (1 month)
- 160g/km: £1,445 (12 months), £361 (3 months), £119 (1 month)
- 165g/km: £1,508 (12 months), £377 (3 months), £125 (1 month)
- 170g/km: £1,576 (12 months), £393 (3 months), £130 (1 month)
- 175g/km: £1,640 (12 months), £409 (3 months), £136 (1 month)
- 180g/km: £1,708 (12 months), £426 (3 months), £142 (1 month)
- 185g/km: £1,771 (12 months), £442 (3 months), £146 (1 month)
- 190g/km: £1,839 (12 months), £459 (3 months), £152 (1 month)
- 195g/km: £1,902 (12 months), £475 (3 months), £158 (1 month)
- 200g/km: £1,971 (12 months), £492 (3 months), £163 (1 month)
- 205g/km: £2,034 (12 months), £509 (3 months), £169 (1 month)
- 210g/km: £2,102 (12 months), £524 (3 months), £174 (1 month)
- 215g/km: £2,165 (12 months), £541 (3 months), £180 (1 month)
- 220g/km: £2,233 (12 months), £557 (3 months), £185 (1 month)
- 225g/km or more: £2,297 (12 months), £574 (3 months), £190 (1 month)
Calculating Charges for Older Vehicles
For motorists with older petrol and diesel vehicles that lack a CO2 emissions figure, the CO2 band must be determined using the vehicle's engine size. According to ETA Insurance, this typically applies to vehicles registered before 2001.
HMRC explains: "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..." To calculate, work out how much of the accounting period you used each car for, record this as a percentage, and apply it to each road fuel scale charge to get a total figure.
Motorists can reclaim the VAT in full and pay the road fuel scale charge, reclaim no VAT whatsoever, or monitor the split between business and personal mileage to partially recover some VAT.
