HMRC has published new VAT road fuel scale charges for the year from 1 May 2026, and while this is not the biggest tax story on any owner-manager’s desk, it is exactly the sort of routine change that can create avoidable errors if a business runs company cars and handles VAT on autopilot.
The updated tables apply to VAT-registered businesses that use the road fuel scale charge method to account for private fuel used in a business vehicle. HMRC says the new scales must be used from the start of the next prescribed accounting period beginning on or after 1 May 2026. In other words, this is a practical change for the next VAT return cycle, not something to leave buried in a finance folder until summer.
What has changed
The new figures cover annual, quarterly and monthly VAT accounting periods, and they still work the same way. Businesses must identify a car’s CO2 emissions band, then use the matching fixed fuel scale charge for their VAT period. If the emissions figure is not a multiple of five, HMRC says it should be rounded down to the nearest multiple of five.
The notable point this year is that the values are slightly lower than the current 2025 to 2026 tables. For example, a car in the 120-or-less CO2 band moves from a VAT-inclusive annual scale charge of £661 to £657. At the top end, the 225-or-more band moves from £2,314 to £2,297 for a 12 month period. Quarterly and monthly figures also edge down.
That is not a windfall. But it does mean firms that use the scale charge method should not simply roll forward last year’s figures. A small difference repeated across several vehicles or several VAT periods is still the kind of thing that can produce messy corrections later, especially in businesses where bookkeeping is split between internal staff and an external accountant.
Why this matters for small businesses
This issue mainly affects SMEs that buy road fuel through the business and allow some private use of a company car. For those firms, fuel VAT can get surprisingly fiddly. The scale charge method is designed to simplify that admin, but only if the correct band and the correct period are used.
There is also a timing point here. HMRC’s guidance says businesses must switch to the new scales from the start of the next prescribed accounting period beginning on or after 1 May. So if your VAT quarter starts in May, June or later, this change may hit sooner than whoever handles the return expects.
For small firms already watching vehicle costs closely, this sits alongside the wider pressure on transport spending. Fuel prices remain a live issue for trades, delivery operators and mobile service businesses, as we noted recently in our coverage of fuel duty uncertainty and what it could mean for UK small businesses. The scale charge update will not transform those costs, but it does affect how some businesses account for them.
What to check now
First, confirm whether your business actually uses road fuel scale charges. Plenty of smaller companies do not look at this area very often until a VAT return is due, which is exactly why routine HMRC updates get missed.
Second, check that each relevant vehicle has the right CO2 figure on file. HMRC says businesses can use the figure from the logbook, the online DVLA vehicle service, or certain approval certificates. If a car is too old to have a CO2 figure, the guidance says the business should use the engine-size fallback bands instead.
Third, make sure whoever prepares your next VAT return is using the 2026 to 2027 table and not a saved spreadsheet from last year. This is a simple control, but it is often where small finance errors begin. If your wider tax processes are already being updated this year, it is another reminder that admin details matter, much as they do with bigger compliance shifts such as Making Tax Digital for Income Tax.
The practical takeaway
HMRC’s new VAT fuel scale charges are a modest change, not a headline-grabbing reform. But they are still worth checking now if your business pays for fuel on company cars and uses the scale charge method for private use.
The best move for SMEs is simple: identify the affected vehicles, update the figures before the next relevant VAT period starts, and make sure the person filing the return is not relying on last year’s table. It is a small job, but it is easier to get right now than to fix later.
Sources
- GOV.UK, VAT road fuel scale charges from 1 May 2026 to 30 April 2027, published 17 April 2026
- GOV.UK, VAT road fuel scale charges from 1 May 2025 to 30 April 2026, accessed 17 April 2026
- GOV.UK, Motoring expenses (VAT Notice 700/64), accessed 17 April 2026
