Red diesel is a fuel used for power generation in off-road vehicles, machinery and sometimes heating. In the UK it is commonly used by the construction or farming sectors and in hospitals or schools for generators. Red diesel is the same as regular diesel, it just has a red dye added to it for tax reasons. You must ensure you only use this product in applications approved by UK law. This and other common questions are answered below:
The VAT (value-added tax) charged on red diesel is 5% up to 2,300 litres. This increases to the regular rate of 20% VAT above 2,300 litres – however, you may be able to claim 15% back if you are eligible for fuel duty relief. An example of this would be if you are using fuel for horticultural produce such as to help grow fruit, you could be eligible for claiming repayment. For more details of this, we advise you to check the Government’s website resources on fuel duty relief.
Red diesel has a red dye added to it for identification purposes. This is important because this type of fuel is only intended for specific use cases. In the UK red diesel has a lower tax rate than regular diesel and must be identifiable for illegal usage. The red dye enables government bodies such as customs and excise to be able to trace the fuel back to the source and differentiate it from regular white diesel.
Using red diesel in a vehicle on public roads is illegal in almost all cases. You can only use the fuel in place of regular white diesel where the law allows, such as using the fuel in a tractor within 1.5km of a farm where land may be divided by the public highway. Another exception is that tractors can use red diesel to grit the roads during bad weather periods.
We recommend that you check the Government’s website for specifics for your own use case to ensure you are operating within the confinements of the law.
Due to the tax being different on red diesel vs white diesel if you are using the incorrect fuel you are paying the incorrect tax. To help identify illegal usage, the red dye is added which is very difficult to remove. If you’re caught using red diesel wrongly during random spot checks, there’s no hiding it and you’ll likely receive a fine and further repercussions.
We advise people to be absolutely sure they are eligible for using red diesel and to ensure you fill in the correct documentation.
Red diesel is the exact same fuel as regular diesel, so any vehicles, equipment and machinery that can be powered on derv can also run on red diesel, as long as it’s within the law.
Some common uses include powering generators, machinery, boats, off-road vehicles or heating applications. We have a wide range of customers from milk bottling factories, dairy farms, schools, hospitals & construction companies to name a few.
Yes, lots of people use red diesel as heating oil, however industrial heating oil (IHO) is a low-priced, drop-in alternative, with an array of added-value benefits.
IHO’s physical properties are exactly the same as gas oil and are commonly used in commercial boilers, dryers and heaters as it preserves output and performance.
In 2017 it was reported that 15% of total diesel use in the UK was red diesel. This accounts for around £2.4 billion a year in tax reductions vs if the diesel was charged at the main rate.
