Vehicle Fuel
OverheadsThis Overheads code records the cost of vehicle fuel incurred in running the business. As an expense account, it normally carries a debit balance: debit entries increase the balance (recording new costs) and credit entries decrease it (for example, correcting an error or a refund received).
Real-world examples
Delivery or logistics (van fleet)
A delivery firm running a fleet of vans fuels up on a company fuel card, with the provider issuing a single VAT invoice covering every fill-up across the fleet for the month. A £2,160 statement (£1,800 net) is a debit of £1,800 to 7300 (Vehicle Fuel), a debit of £360 to 2201 (Purchase Tax Control Account), and a credit of £2,160 to 2100 (Creditors Control Account). Because the vans are business-only commercial vehicles, the full input VAT is recoverable without restriction.
Sales team (company cars, private use)
A business with company cars available for staff to use privately as well as for work still reclaims VAT in full on fuel bought through the company, in the same way as the van fleet above. The difference shows up elsewhere: because private mileage is being driven on business-funded fuel, the business must account for output VAT on that private use via the fuel scale charge (code 7350), rather than trying to restrict the input VAT on 7300 itself.
Consultancy (mileage-only, no company vehicles)
A consultancy with no company vehicles simply reimburses staff for business mileage in their own cars. No fuel is ever purchased by the business itself, so nothing is posted to 7300 at all — the reimbursement is recorded through 7306 (Mileage Claims) instead, following HMRC's approved mileage rates rather than actual fuel invoices.
Commonly confused with
Because code 7301 (Vehicle Repairs and Servicing) sits right next to this one in Overheads, it's a common mis-posting target. Code 7300 is specifically for vehicle fuel, while 7301 covers vehicle repairs and servicing — similar in nature, but keeping them separate is what makes the overheads section of your management accounts meaningful rather than a single lumped total.
What a mis-posting here costs you
An error posting to Vehicle Fuel won't change total overhead spend, but it will distort the overheads breakdown that's usually reviewed line by line each month to spot cost creep.