HMRC confirms new VAT charges for drivers with newer vehicles from Might 1

The brand new expenses apply to each petrol and diesel drivers till April 30, 2027.

Modern gas station with diesel and petrol nozzles, capturing the essence of fuel supply for everyday travel and convenience

The brand new VAT highway gas scale expenses will probably be in place till April 30, 2027 (Picture: Getty)

HM Income and Customs (HMRC) has confirmed new VAT charges for petrol and diesel drivers with newer vehicles throughout the UK.

New VAT highway gas scale expenses got here into impact on Might 1, 2026, and can stay in place till April 30, 2027, with 1000’s of drivers anticipated to be impacted by the modifications. Street gas scale expenses are a hard and fast quantity accredited by HMRC which might be added to a VAT return to account for the non-public consumption of gas in a enterprise car. These expenses apply to automobiles primarily based on CO2 emissions and the charges are up to date by HMRC as soon as yearly.

We use your sign-up to offer content material in methods you have consented to and to enhance our understanding of you. This will likely embrace adverts from us and third events primarily based on our understanding. You’ll be able to unsubscribe at any time. Learn our Privateness Coverage

The costs are accounted for by together with them in Field 1 of your VAT return and are mounted quantities no matter the quantity of personal mileage you clock up.

Drivers must work out the proper highway gas cost primarily based on their automobile’s CO2 emissions, and the size of their VAT accounting interval, which will probably be both one, three or 12 months.

DVSA confirms new £62 rule for drivers from Might 12
British Fuel confirms new 9am rule for purchasers on Saturdays
The charges enhance in bands of 5g per kilometre of CO2 emissions, with VAT-inclusive expenses starting from £657 for automobiles emitting 120g or much less of CO2 per km, to £2,297 for automobiles emitting 225g/km for a 12-month interval.
Newer vehicles registered on or after March 1, 2001, have an official CO2 emissions determine recorded on the V5C registration certificates, and this can be utilized to determine the VAT highway gas scale expenses.
HMRC mentioned: “You’ll must work out the proper highway gas cost, primarily based in your automobile’s CO2 emissions, and the size of your VAT accounting interval. This will probably be both one, 3, or 12 months.
“You’ll must verify your automobile’s CO2 emissions determine on-line in case you can not get this out of your logbook. If the determine isn’t a a number of of 5, spherical it all the way down to the closest a number of of 5.
“The CO2 emissions determine may additionally be specified, on both a:
- UK approval certificates
corresponding certificates of conformity, issued by a producer in one other member state

“You need to use one in every of these certificates to work out the automobile’s CO2 emissions determine, for the needs of the valuation desk.”

Drivers with older vehicles registered earlier than Might 1, 2001, will as an alternative must determine the CO2 band primarily based on their automobile’s engine dimension to work out the cost.

HMRC explains: “For vehicles first registered earlier than 1 March 2001 the accredited CO2 emissions determine isn’t proven on the automobile registration certificates (V5C).

“It is not going to at all times be included within the proprietor’s handbook for the automobile and, even whether it is, the determine might not relate to that specific automobile and so might not be sufficiently correct. Because of this the proprietor or lessor of the automobile might not have particulars of the CO2 emissions determine.”

Explaining how one can work out the CO2 emissions determine for older vehicles, HMRC mentioned: “In case your automobile is simply too previous to have a CO2 emissions determine, it is best to determine the CO2 band primarily based on its engine dimension. If its cylinder capability is:

1,400 or much less, use CO2 band 140

greater than 1,400cc however lower than 2,000cc, use CO2 band 175
greater than 2,000 cc, use CO2 band 225 or extra

“To do that, work out how a lot of the accounting interval you used every automobile for, and document this as a share of the accounting interval. Apply this share to every highway gas scale cost, to get a complete determine.”

Drivers have the choice of recovering the VAT in full and paying the highway gas scale cost, not recovering any VAT in any respect, or monitoring the cut up between enterprise and private mileage to partially get well some VAT.

Listed are the brand new VAT highway gas scale expenses from Might 1, 2026, to April 30, 2027, for a 12 month, three month and one month accounting interval, as confirmed by HMRC: