The Value Added Tax (Flat-rate Valuation of Supplies of Fuel for Private Use) Order 2013

EXPLANATORY NOTE

(This note is not part of the Order)

Value Added Tax (“VAT”) is payable if road fuel acquired by a business is used for private motoring. Council Decision 659/2006/EC of 25th September 2006 (O.J. No. L 272. 3.10.2006, p.15) authorises the United Kingdom to fix, on a flat-rate basis, the proportion of VAT that relates to expenditure on fuel incurred by a business which is used for private purposes. That proportion is required to be expressed in fixed amounts and is to be established on the basis of the CO₂ emissions level of the type of vehicle to reflect fuel consumption. The amounts must be adjusted annually to reflect changes in the average cost of fuel.

Paragraph A1 of Schedule 6 to the Value Added Tax Act 1994 provides that, where fuel is provided for (or appropriated to) private use, a taxpayer may opt to value all such supplies on a flat-rate basis. Paragraph B1 of that Schedule provides that the Treasury must, by order, make provision for the flat-rate valuation of those supplies. This Order makes that provision.

Article 2 provides that the flat-rate basis for the valuation of supplies of road fuel for private use must be determined in accordance with the valuation table and the notes to that valuation table.

Article 3 defines what is meant by “valuation table” and introduces the base valuation table which is set out in Schedule 1.

Article 4 defines the notes to the valuation table as the notes set out in Schedule 2.

Article 5 provides that the Commissioners are required to revalorise the amounts of the flat-rate charge, must do so in accordance with the method set out in Schedule 3, provides a time limit in which the first revalorisation must be carried out and that they must revalorise at least once in each twelve month period.

Article 6 provides that each time the amounts of the flat-rate charge are revalorised an updated valuation table is to take effect from a date specified by the Commissioners.

Article 7 requires the Commissioners to publish the updated valuation table and to publish a statement specifying the date from which that table is to take effect.

A Tax Information and Impact Note covering this instrument will be published on the HMRC website at http://www.hmrc.gov.uk/thelibrary/tiins.htm.