Scale Charges

This Overheads code records the cost of scale charges 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

Company cars available for private use

A business that provides company cars available for private use, and reclaims input VAT in full on all fuel bought for those cars (both business and private mileage), must account for output VAT on the private-use element via the fuel scale charge. HMRC publishes a fixed quarterly charge per vehicle based on its CO2 emissions band, which is credited to output VAT and debited as a cost to 7350 (Scale Charges) — a mechanism rather than a supplier invoice, so there's no creditor entry at all.

Business-only fleet, no private use

A business that only ever provides pool cars or vans, with a genuine no-private-use policy backed by mileage logs, has nothing to account for here — because there's no private fuel benefit to offset, the scale charge simply doesn't apply, and this code stays at nil. It only comes into play once private use of company-funded fuel is actually happening.

Commonly confused with

Because code 7306 (Mileage Claims) sits right next to this one in Overheads, it's a common mis-posting target. Code 7350 is specifically for scale charges, while 7306 covers mileage claims — 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 Scale Charges 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.

Other codes in Overheads