VAT: Reminder re the increase in VAT Fuel Scale Charges from 1 May 2010
We have recently had a number of calls from businesses asking about the new fuel scale charges and when they should be implemented from. This is therefore a good time to provide a reminder of the background to this area of VAT. Businesses that recover input tax on fuel used for private motoring by their employees require to pay HMRC a fuel scale charge as a compensation for reclaiming input VAT they were not entitled to. The increase in the fuel scale charge was highlighted in the first Budget earlier this year but did not come into effect immediately. The changes came into force on 1 May 2010 and businesses must use the new scale charges from the start of their next ‘prescribed accounting period’ beginning on or after 1 May 2010. If your business submits monthly returns these new charges came into effect on the VAT return due for the period 1 to 31 May 2010. However, if your next VAT return was / is for the quarter to April, May, June or July 2010 the new charges will not effect you until the next VAT quarter i.e. the VAT return due for the period 1 May to 31 July 2010.which will be prepared during this month of August.
Details of the new charges can be found at http://www.hmrc.gov.uk/budget2010/march/bn44.pdf If you wish further advice speak to your usual contact at Wylie & Bisset, telephone 0141 566 7000 or email info@wyliebisset.com.
