Originally Posted by jwalker
So what's so difficult to understand?
From the document linked above:....
Charging duty and VAT
The following is an illustration /example of a calculation of duty and VAT under the new
arrangements. It is intended to be an illustration only. The proportion split between
propulsion and domestic usage will vary.
HMRC have confirmed that VAT is charged at the reduced rate of 5% on fuel for propulsion
and domestic use.
This example assumes a 60% (propulsion) and 40% (domestic) split for a purchase of 100
litres of red diesel (the price of diesel is assumed to be 0.70ppl which includes 9.69ppl duty
already paid to fuel supplier):
Propulsion calculation(i.e. 60%)
60 litres @ 0.70ppl = £42
60 litres @ 0.4066 = £24.40 (additional duty)
VAT @ 5% = £3.32
Propulsion Total = £69.72
Domestic calculation (i.e. 40%)
40 litres @ 0.70ppl = £28
VAT @ 5% = £ 1.40
Domestic Total = £29.40
Transaction Total = £99.12