Fuel Scale Charges & VAT

I understand I have to enter a manual adjustment on the VAT Return, however, I then have
a balance on my Manual Adjustment account. Can you please advise the journals I should do?

You need to do journal for extra vat bit only which is payable as
Dr Motor Exp
Cr Vat payable

This post may also be helpful…also this one on our old forum.


This confuses me.

If fuel is paid for a fully expensed business vehicle. Then the fuel paid for would be,

Dr Motor Expenses (or equiv)
Dr VAT Account
Cr Bank

But then then when the scale charge journal is done as above

Dr Motor Expenses

This is increasing the motor expenses account? Or should the DR be Scale Charges? But still shouldn’t this reduce the expenses?

If it is fully business use vehicle only then there wont be any scale charge, it is primarily for private use portion of vat.

Ok but the confusing bit for me then is how is the initial fuel being accounted for? As I understand it. Fuel is bought… early in the month for a business vehicle. Dr Fuel, Cr Bank.

But due to some personal use as well then Dr Scale Charge and Cr VAT… that’s the bit than confuses me the original Dr to Fuel + the Dr the Scale Charge this is effectively reducing profits and could impact on CT or PT return? I see it’s correctly adjusted VAT to create the liability which makes sense but it’s the further Dr that confuses me? Thanks for your advise on this - it’s really helpful. Thanks

Scale Charge amount is for reconciliation purpose only it does not get adjusted in accounts , Only VAT element is paid back to HMRC for private use in scale charge and Dr goes to Motor expense on same principle if one was not vat registered then total expense would be inclusive of vat

This topic was automatically closed after 7 days. New replies are no longer allowed.