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HMRC internal manual

VAT Retail schemes guidance

Special arrangements for certain professions or trades: Petrol stations

Many petrol stations accept fuel cards of the kind described in VATSC96600. Under most schemes, the supply of petrol etc to the motorist is made by the card company. Where this is the case, the site operator merely acts as an agent for the card company in providing the fuel to the card company’s customer. Such transactions are not retail sales by the retailer and should therefore be excluded from the site operator’s retail scheme calculations.

The supply by the site operator to the card company must be accounted for outside the retail scheme.

It is important when reviewing retail schemes used by petrol stations that the various fuel card schemes (as described in VATSC96600) are identified and the implications for VAT accounting properly considered.

Customers who make off without payment

Where a motorist drives off without paying for petrol already taken, there is no supply for VAT purposes and the DGT can be adjusted provided the trader has satisfactory records.

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Use of pump readings

Subject to the implications above on fuel cards, the use of daily meter readings to record the DGT for petrol supplies is allowable at local discretion. Officers should be satisfied that the method will result in an accurate valuation of retail sales (remember that sales to other VAT-registered businesses, other than occasional cash sales, must be dealt with outside the retail scheme) and will be done at least daily. The retailer must use the full tax-inclusive retail selling price for each grade of fuel. But if a discount is given for bulk sales, the DGT calculation must be adjusted accordingly.

Alternatively, storage tank dipstick readings may be used to assess opening and closing stock in each tax period; or meter readings may be used to calculate delivered quantities on a quarterly basis, provided you are satisfied that this will give an accurate result.

Any such agreements must be made in writing.