What VAT rate applies to each fuel?
Road fuel is charged at the standard rate of 20% and home energy at the reduced rate of 5%. Business energy is normally 20%, though small quantities can count as domestic. Northern Ireland uses the same rates as Great Britain. The table shows each fuel.
| Fuel | VAT rate | Notes |
|---|---|---|
| Petrol and diesel for road vehicles | 20% | Charged on the price including fuel duty |
| Electricity and gas for homes | 5% | Domestic fuel and power |
| Heating oil, LPG, coal and logs for homes | 5% | Domestic fuel and power |
| Electricity, gas and heating fuel for business use | 20% | Small quantities can count as domestic |
| Northern Ireland | Same as GB | UK rates apply |
Is VAT charged on fuel duty?
Yes. Fuel duty is a fixed amount per litre, added before VAT. VAT is then charged on the whole price, duty included, so part of the VAT you pay at the pump is tax on a tax. This is why VAT per litre rises when duty rises.
Say, for example, the price before VAT is £1.1667 a litre, and part of that is duty. VAT at 20% adds £0.2333, giving £1.40. If the duty part were 50p, then 10p of the VAT (50p × 20%) would be VAT on the duty. These figures are an illustration only, not today's duty rate.
How do you find the VAT in a pump price?
Divide the pump price by 6. Pump prices include VAT, and at 20% the VAT is one sixth of what you pay. So on a £1.40 litre the VAT is £0.2333 and the price without VAT is £1.1667. The same method works for diesel and any other fuel at 20%.
For example, at £1.40 a litre:
- VAT = £1.40 ÷ 6 = £0.2333
- price without VAT = £1.40 − £0.2333 = £1.1667
On a 50 litre fill at that price:
Total paid50 × £1.40 = £70.00
VAT£70.00 ÷ 6 = £11.67
Net of VAT£70.00 − £11.67 = £58.33
Our reverse VAT calculator does this for any receipt.
What VAT do you pay on home heating and energy?
Homes pay the reduced rate of 5% on gas, electricity, heating oil, LPG, coal and similar fuels. Charities using fuel for non-business purposes also pay 5%. Businesses normally pay 20%, unless their supply is small enough to count as domestic under HMRC's rules.
Examples of business supplies that count as domestic:
- deliveries of 2,300 litres or less of heating oil
- electricity use of no more than 33 kWh a day
HMRC sets out the full rules in VAT Notice 701/19 on fuel and power.
How do you reclaim VAT on business fuel?
If you are VAT registered and use a vehicle for business, you can reclaim VAT on its fuel. Where it is also used privately, you choose one of three methods. Reclaim all and pay a fuel scale charge, reclaim business mileage only, or reclaim none.
| Method | You reclaim | You pay back | Records |
|---|---|---|---|
| All fuel VAT | All VAT on fuel bought | Fuel scale charge per car with private use | Fuel receipts |
| Business mileage only | VAT on the business share | Nothing extra | Mileage log, business and private |
| None | Nothing | Nothing | None for fuel VAT |
If a vehicle has no private use at all, you can reclaim all the fuel VAT without a scale charge.
All fuel, with the fuel scale charge
You reclaim all the VAT on fuel. Then you add a fixed fuel scale charge to your output VAT (the VAT you owe HMRC) for each car used privately. The charge depends on the car's CO2 emissions and your VAT period length. HMRC publishes the current fuel scale charge table, and our fuel scale charge calculator gives the figure for your car.
This suits high private mileage, and people who do not want to keep a mileage log.
Business mileage only
You reclaim VAT only on the fuel used for business journeys. You need records of every journey, business and private, so you can show the split.
This suits low private mileage, where the scale charge would cost more than the VAT you save.
Reclaim nothing
You do not reclaim any VAT on fuel, and you pay no scale charge. If you choose this, it applies to all your vehicles, including vans and lorries. It can suit very low business mileage, but check you are not giving up more than you save.
Worked example: which method saves more
Say you spend £1,200 on fuel in a quarter, including VAT at 20%. Your mileage log shows 75% of your miles are for business.
- VAT on all the fuel = £1,200 ÷ 6 = £200
- business mileage method: you reclaim 75% × £200 = £150
- all fuel method: you reclaim £200, then pay the VAT inside the scale charge
The all fuel method only wins if the VAT inside your quarterly scale charge is less than £50 (£200 − £150). Check your car's figure in the fuel scale charge calculator before you choose.
Mileage allowances
If you pay employees a mileage allowance for using their own cars, you can reclaim VAT on the fuel part of it. Use HMRC's advisory fuel rates, and keep the VAT receipts for fuel the employee bought.
Which EU fuel VAT cuts ended in 2026?
Both temporary EU fuel VAT cuts of 2026 have ended. Poland charged 8% on motor fuel until 30 April 2026. Spain charged 10% on some energy from 22 March to 1 June 2026. Current standard and reduced rates are on our pages for each country.
See the current rates for Poland and Spain.
What to do next
- Work out the VAT on any fuel receipt with the reverse VAT calculator.
- Compare the reclaim methods using your car's figure in the fuel scale charge calculator.
- Check other UK rates in our UK VAT rates guide.
General guidance only. Check gov.uk or ask an accountant about your own case.
Questions
How much VAT is in a litre of petrol?
One sixth of the pump price. For example, at £1.40 a litre, the VAT is £1.40 ÷ 6 = £0.2333.
Is VAT charged on fuel duty?
Yes. VAT at 20% is worked out on the price including fuel duty, so you pay VAT on the duty as well as on the fuel.
What is the VAT rate on heating oil?
5% for domestic use. Business use is normally 20%, but deliveries of 2,300 litres or less are treated as domestic.
Can I reclaim VAT on fuel for my car?
Yes, if you are VAT registered and the car is used for business. With private use, you have three choices. Reclaim all the VAT and pay the fuel scale charge, reclaim only the business share from a mileage log, or reclaim none.
Are the EU fuel VAT cuts still in place?
No. Poland's 8% rate on motor fuel ended on 30 April 2026 and Spain's 10% rate on some energy ended on 1 June 2026.
Figures in this guide come from our rules file, last checked against HMRC on 4 October 2026.
