Explanatory note

VAT is payable if road fuel of a business is used for private motoring. The VAT due must be calculated using flat-rate values related to engine type and size^f1.

This Order increases those flat-rates by an average of 6.1 per cent for diesel vehicles and 5.0 per cent for those using other fuels. This reflects the increase in road fuel costs which has occurred since Table A in section 57 of the Value Added Tax Act 1994 (c. 23) was last amended^f2.

The new rates apply to any relevant accounting period starting after 30th April 2003^f3.