HC Deb 10 May 1994 vol 243 cc124-5W
Mr. Spellar

To ask the Chancellor of the Exchequer what level of VAT or tax is levied on(a) motor vehicle fuel, (b) fuel for railway locomotives and (c) aviation fuel.

Sir John Cope

Value added tax is levied as follows(a) All supplies of road fuel are liable to VAT on the standard rate of 17–5 per cent. VAT is due on the total value including the excise duty. (b&c) Supplies of fuel and power for railway locomotives and of aviation fuel are also normally liable to VAT at the standard rate of 17.5 per cent. If, unusually, the supply is of a very small quantity of fuel then it may fall within the "qualifying use" criteria set out in Schedule 5, Group 7, Note (2) of the VAT Act 1983 and, as such, by virtue of Section 42 of the Finance Act 1993, is currently liable to VAT at 8 per cent. From 1 April 1995 these supplies will also be liable to VAT at 17–5 per cent. (c) Supplies of fuel delivered as stores direct to non-private foreign going aircraft may be zero-rated subject to meeting the Stipulated conditions.

Excise duty is levied at the following rates:

  1. (a) Motor vehicle fuel
    • Leaded petrol—33.14 pence per litre
    • Unleaded petrol—28.32 pence per litre
    • Diesel road fuel—27.70 pence per litre
    • Gas used as road fuel—16.57 pence per liquid litre
  2. (b) Railway locomotive fuel
    • Rebated gas oil (diesel)—1.64 pence per litre
    • Electricity—No excise duty liability
    • Coal—No excise duty liability
  3. (c) Aviation fuel
    • Aviation gasoline—16.57 pence per litre
    • Aviation turbine fuel (kerosene)—Nil

Mr. David Nicholson

To ask the Chancellor of the Exchequer what representations he has received suggesting that the charging of VAT on company cars should be rescinded on legal grounds; and if he will make a statement.

Sir John Cope

None, although I understand that a number of businesses have challenged the current United Kingdom VAT regime for cars on legal grounds. Taxation of the private use of business cars is mandatory under Community law. Since the inception of the tax in April 1973, the United Kingdom has achieved this through restricting tax recovery on the purchase of cars. The current legal basis for this simplified procedure is article 17(6) of the sixth directive (77/388/EEC).