HMRC and the Labour Party government have confirmed new VAT road fuel scale charges for petrol and diesel drivers, effective from May 1, 2026, and remaining in force until April 30, 2027.
New VAT Rates Based on CO2 Emissions
Businesses must use the updated scales from the start of their next prescribed accounting period beginning on or after May 1, 2026. The charges vary depending on the vehicle's CO2 emissions and the length of the VAT accounting period, which can be one, three, or 12 months.
HMRC stated: "The VAT Road fuel scale charges are amended with effect from 1 May 2026. Businesses must use the new scales from the start of the next prescribed accounting period beginning on or after 1 May 2026. You’ll need to work out the correct road fuel charge, based on your car’s CO2 emissions, and the length of your VAT accounting period. This will be either one, 3, or 12 months."
Detailed Charges for Different Emission Bands
For vehicles with CO2 emissions of 120g/km or less, the 12-month charge is £657.00, the three-month charge is £163.00, and the one-month charge is £54.00.
For emissions between 125g/km and 150g/km, charges increase progressively. For example, at 125g/km, the 12-month charge is £983.00, three-month £246.00, and one-month £81.00. At 150g/km, the charges rise to £1,314.00 for 12 months, £328.00 for three months, and £109.00 for one month.
Higher Emissions Bands
For emissions from 155g/km to 180g/km, the 12-month charge ranges from £1,377.00 (155g/km) to £1,708.00 (180g/km). Corresponding three-month charges range from £344.00 to £426.00, and one-month charges from £114.00 to £142.00.
For emissions between 185g/km and 220g/km, the 12-month charge starts at £1,771.00 (185g/km) and reaches £2,233.00 (220g/km). Three-month charges span from £442.00 to £557.00, and one-month charges from £146.00 to £185.00.
Highest Emission Category
Vehicles with CO2 emissions of 225g/km or more face the highest charges: £2,297.00 for a 12-month period, £574.00 for three months, and £190.00 for one month.
These updated rates aim to reflect current fuel prices and encourage lower emissions, impacting businesses that provide fuel for company cars.
