Red Diesel Tax Changes – Is Your Sector Affected?
From April 1st 2022, there are new rules surrounding the use of rebated red diesel and rebated biofuels.
The new legislation is being introduced to help the UK achieve its 2050 net zero carbon target by decreasing commercial reliance on fossil fuels. A large number of sectors will no longer be able to burn fuels at a rebated rate and will instead have to use alternative fuels.
We’ve summarised the latest information from HMRC to help you understand what to do if you have leftover rebated fuel and how to manage the changes.
Beesley Fuels is on hand to provide full guidance and advice along the way to help simplify your fuel transition as a result of the tax changes.
If your business falls into the categories below, you can continue to use red diesel
- Rail transport
- Community amateur sports clubs and golf courses
- Sailing, boating and marine transport (excluding private pleasure craft in Northern Ireland)
- Travelling fairs and circuses
- Fuel used for non-commercial purposes – electricity generation and heating
- Agriculture, horticulture, fish farming and forestry
The fuels affected by the rule changes are
- Fuel substitutes
- Kerosene taxed at the rebated diesel rate
- Rebated biodiesel and bioblend
- Rebated (white) diesel
- Rebated (white) HVO fuel
Sectors unable to use rebated fuel after 1 April
- Airport operations
- Commercial heating
- Construction and road maintenance
- Leisure
- Logistics and haulage (including refrigeration units)
- Manufacturing (such as ceramics, timber and steel)
- Mining and quarrying
- Oil and gas extraction
- Waste management
Key points to note about the upcoming changes
- If you’re not in an exempt industry, you must have moved to full-duty fuels by April 1st 2022
- You will not be required to clean and flush your tanks before moving to full duty fuels
- Save all your invoices and receipts to prove that you haven’t been stockpiling and have been purchasing full-duty fuels
- Non-commercial bodies can continue to purchase red diesel for heating and electricity generation
What you need to do with your leftover rebated fuel after 1st April
Hopefully, you will have used up your stock of rebated fuel. If not, you will have to:
- sell or give it to someone who’s allowed to use it
- sell or give it to any Registered Dealer in Controlled Oil (RDCO
- dispose of it using an approved waste oil recycling or disposal company
You can sell or dispose of the fuel without needing to be approved by HMRC as an RDCO, but you must hold on to all records to demonstrate how this was done. It’s essential that you dispose of rebated fuel safely and correctly by using an approved waste oil recycling or disposal company like Crown Oil.
Rules surrounding standby electricity generation and critical equipment
Standby electricity generation refers to those which are used to ensure continuity of power for a critical or essential service, such as:
- protecting national security
- health services such as medical and life support equipment
- water, fuel and power supply
- emergency services and law enforcement
- protecting the welfare of livestock and other animals
Please note: this doesn’t include generators that are used every day as the main source of electricity.
What can rebated fuel be used for?
- commercial electricity generators that help manage pressures on the national grid
- in instances where a volume of back-up fuel is needed for security and regulatory purposes to sustain a vital electricity supply
After 1st April, you can only use rebated fuel in a machine that is used for generating power in non-commercial premises. You can use up any rebated fuel that you acquired before 11th June 2021 for standby electricity generation in premises used in commercial premises, or for critical equipment used in commercial premises
If you expect that you’ll have rebated fuel which was acquired for either of these uses on or after the 11th June 2021, contact HMRC at [email protected]. They will determine if you can be issued a licence in which you can pay the difference in duty between the rebated and non-rebated rates and use up the rebated fuel on hand on the 1st April for a non-accepted use.
Please note:
- A licence will not allow you to continue using rebated fuel indefinitely and will be reviewed
- You will only be permitted to use rebated fuel that you have until the 1st of April 2022 and then it will be withdrawn
- After this date, you must only order and take a supply of diesel where full duty has been applied
HMRC does not expect you to flush out rebated fuel from storage or running tanks that are used for:
- critical equipment
- stand-by generators
We can help with all aspects of your fuel changeover
- Uplift and buyback your rebated fuel
- Full tank clean if required
- NDT inspection – vital if your tank is over 10 years old
- HVO is supplied at competitive rates with excellent credit terms available
Discover our sustainable fuel solutions
Our cleaner-burning fuels include:
- White HVO fuel
- Industrial heating oil
Learn more about our sustainable fuel solutions.
Rebate fuels information
For all the key information on the red diesel duty changes, download our PDF.
Download our rebate fuel FAQs PDF
If you’d like to learn more about red diesel or any of our other fuels and fuel-related services, call our fuel experts today on 0330 123 1144 to discuss your requirements and learn more.
Free Online Quote
The benefits of using Beesley Fuels
24 – 48 hour Standard Delivery
We deliver on our promise, with 92% of our orders successfully delivered within 24 hours.
24/7 Emergency Delivery
We can come to your rescue with our emergency deliveries, helping you avoid unplanned downtime.
Sustainable Fuelling Solutions
We don't just supply fuel, we have the tools and expertise to help you fuel your business responsibly.
Personal Account Managers
With us, you’ll have one point of contact throughout, who will know your fuel needs inside out.