Misc Motor Expenses, Congestion Charges, Mileage & Scale Charges: Codes 7304, 7305, 7306 & 7350

Beyond the core running costs of fuel, servicing, tax and insurance, motoring throws up a few other regular items — city charges, employee mileage claims, and a VAT quirk specific to businesses that provide fuel for private use.

The codes, and what each one holds

Code 7304 — Miscellaneous Motor Expenses is a catch-all for smaller motoring costs that don't fit the main vehicle codes, such as car parking or valeting.

Code 7305 — Congestion Charges records London Congestion Charge, ULEZ, or similar city driving charges.

Code 7306 — Mileage Claims records reimbursements to employees who use their own vehicle for business travel, typically at the HMRC-approved mileage rate.

Code 7350 — Scale Charges records the VAT fuel scale charge — a fixed addition to the VAT return that accounts for private fuel use where a business reclaims VAT on all fuel bought, including for personal journeys. All four are Overheads codes and normally carry a debit balance.

Real-world examples across industries

Field sales or consultancy

A consultant drives 300 business miles this month in their own car, claiming at 45p a mile — £135 debited to 7306 (Mileage Claims), credit £135 to 2100. Because part of that payment effectively reimburses fuel, a VAT-registered business can reclaim input VAT on the fuel element only, using HMRC's advisory fuel rates and provided a valid VAT fuel receipt covering at least that amount is kept — the rest of the payment, covering wear and tear and depreciation, carries no VAT. Separately, £24 (£20 net) of parking at a privately run car park is a debit of £20 to 7304 (Miscellaneous Motor Expenses), debit £4 to 2201, credit £24 to 2100; an on-street council parking charge of £6 that same week goes to 7304 in full, since local-authority parking is treated as outside the scope of VAT — no VAT to split out at all.

Courier or logistics, central London

A courier fleet running in central London racks up £480 of congestion charge and ULEZ account charges for the month — debited in full to 7305 (Congestion Charges), with nothing split out to 2201, since Transport for London administers these as a statutory traffic charge rather than a taxable supply. Separately, vehicle washes and small running repairs across the fleet come to £48 (£40 net) — an ordinary standard-rated purchase, debit £40 to 7304, debit £8 to 2201, credit £48 to 2100. The two codes sit side by side in the accounts but follow completely different VAT rules, which is exactly why keeping them apart matters here.

Business with a mixed fleet

A field-based business has some staff driving their own cars, claiming mileage through 7306 as above, and others driving company cars available for private use. For those company cars, the business reclaims input VAT in full on all fuel bought — business and private — so it must account for output VAT on the private-use element via the quarterly fuel scale charge: say £68 per vehicle, debited to 7350 (Scale Charges) alongside the matching output VAT adjustment on the return, with no creditor entry involved. A third group driving pool vans under a genuine no-private-use policy triggers no scale charge at all.

Why this matters day to day

Mileage claims are worth watching closely since they're one of the most common areas HMRC scrutinises — the reimbursement rate and business/private mileage split both need to be right. The fuel scale charge, meanwhile, is easy to forget entirely if a business reclaims VAT on all fuel; getting it wrong on the VAT return is a common and avoidable compliance slip.