Morning

We provide software to the courier / transportation industry. A fuel surcharge is commonplace, as this caters for the adjustment in monthly fuel price fluctuations without having to alter the basic transport charges every month.

A common discussion point that comes around is whether VAT should be charged on the fuel surcharge portion of the costs. Our argument has always been that the courier is not selling fuel directly to the client, and therefore the fuel used, making up part of the service supplied, should be charged VAT.

Is this correct thinking and is there any documentation supporting this topic, one way or the other?

Thanks