How much will you save with reduced scale charges?

Scale charge system

The purpose of the road fuel scale charge is to reflect the fuel used in your business vehicles for private trips. The figures are not completely accurate because they are based on average use calculations. In other words, you will claim input tax on all road fuel purchases paid for by your business and then declare output tax on each return according to a fixed amount that depends on the CO₂ emissions of your vehicles.

HMRC has recently published rates which cover the period from 1 May 2025 to 30 April 2026, which are nearly 6% lower than the 2024/25 figures; the decrease is due to lower fuel prices at the time of the “revalorisation of the figures”.

You must use the new rates from the return period beginning on or after 1 May 2025. If you submit calendar quarter returns, you will not benefit from the reduction until the September return.

If your business has exempt sales or non-business activities, you will not fully claim input tax on your road fuel purchases.

How does it work?

If your vehicles have CO₂ emissions of 225g/km or more, you will benefit from a cut of 5.7% compared to last year, i.e. from an annual use charge of £2,454 to £2,314. Many vehicles have CO₂ emissions of 120g/km or less so the relevant figure will be £661, down from £702, while 180g/km CO₂ vehicles go down to £1,721 from £1,825.

The above figures reflect the VAT-inclusive consideration of private fuel for a twelve-month prescribed accounting period, i.e. the output tax to declare in Box 1 of your return will apply the VAT fraction of 1/6 to these amounts.

The figures must also reflect the length of your periods, either one or three months, or twelve months if you use the annual accounting scheme.

Alternative method: mileage records

The scale charge system means that you will apply a fixed amount to each car and therefore do not need to ask your employees or vehicle users to keep a detailed mileage log, i.e. to record the actual split between business and private trips. With a mileage log system, you will apportion the input tax you claim on your fuel purchases to reflect private or non-business journeys.

As well as the time saving benefits of the scale charge method, you will pay less tax in some cases, particularly for your vehicles where the business use is low.

You cannot mix and match the two methods; you must either apportion input tax for all of your cars where there is both business and private trips or use the scale charge system instead.

You do not have to apply the fuel scale charge for your company cars which are not available for any private use, e.g. genuine pool cars. If the scale charge and mileage log calculations both give a bad outcome, you can opt to claim no input tax on your road fuel purchases, but this exclusion would apply to all vehicles, including your commercial vehicles such as vans and lorries.