VAT
Fuel Charge Set to Rise
The EC has finally
agreed the UK’s
proposal to align the output VAT charge with the
benefit in kind charge on the provision of private
fuel assessable on the individual. The proposals
and legislation were announced in the 2005 Budget
and will be implemented from May 2007.
The output charge is payable by VAT registered
businesses which allow their employees to claim
all the fuel expenses on their company cars and
reclaim VAT on the full amount of fuel purchased
without making an adjustment for the for private
use. The output charge is currently a maximum of £75.66
per quarter and may rise significantly for those
cars which have the highest CO2 emissions.
We are still awaiting details of how the legislation
will work in practice and we will keep you informed
of developments.
Internet Links:
HMRC current rates |
