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HMRC internal manual

VAT Government and Public Bodies

HM Revenue & Customs
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Section 33 bodies: cars: road fuel

A police authority or local authority that incurs VAT on the purchase of road fuel may treat it in one of the following ways:

  • claim in full where the fuel is used only for official business
  • claim in full and apply the fuel scale charge to private use, with records kept of the engine capacity and type of fuel used by each car
  • claim the proportion of the VAT that relates to official business by reference to detailed mileage records that separate official business mileage from private mileage, or
  • under Extra Statutory Concession A15, as an alternative to applying scale charges, claim no VAT so long as it is applied to all fuel purchases and all vehicles, including commercial vehicles.

A body that reimburses an employee for the total invoiced cost of road fuel may treat the VAT as input tax to the extent that it is used for official business purposes. VAT invoices must be obtained by the employee as evidence to support the claims. However, these will normally be simplified VAT invoices and so will not contain the name of the customer. A body that agrees, perhaps as a recruitment and retention allowance, to meet the private fuel costs of employees who undertake some official business activities, is entitled to recover the VAT incurred as input tax so long as it also applies the appropriate fuel scale charge.