Red Diesel Tax Changes

The laws on the use of Red Diesel (and other rebated fuels) have changed. Since the 1st April 2022 you must not put rebated fuel into a vehicle, vessel, machine or appliance that has not been authorised by the government.

If you are unsure if the changes apply to you, or if you would like some more information, please do not hesitate to contact us.

Red Diesel Tax Changes...What’s Changed?

Controlled Oils are fuel products that are monitored by HMRC as they have less duty compared to non-controlled fuel such as ULSD, Petrol and Lubricants.

The use of these fuels is limited to certain vehicles, vessels, machines and appliances, and only when used for specific purposes.

The rebated fuels affected by these changes are:

  • Red Diesel (Gas Oil).
  • Red HVO.
  • Kerosene (Burning Oil).

Fully rebated kerosene is unaffected by these changes and can be used for all heating uses.

They are also liable for fuel duty if they’re used for heating purposes when used to heat premises used for:

  • Domestic Heating Purposes — you can still use Red Diesel.
  • Commercial Heating Purposes — you can’t use Red Diesel.
Red Diesel Tax Changes...Can Use Red Diesel

Common Examples:

  • Domestic Households for Heating and Electricity Generation.
  • Domestic Mowing.
  • Hospital and Local Authority Schools Heating.
  • Charities (non-profit) Heating.
  • Arable, Dairy and Livestock Farming.
  • Fish Farming.
  • Plant Nurseries.
  • Tree Surgeons.
  • Forestry.
  • Arboriculture.
  • Trains.
  • Boats.
  • Yachts.
  • Ferries.
  • Marinas.
  • Golf Clubs.
  • Travelling Fairs and Circuses.
  • Amateur Sports Clubs.
  • Businesses Cutting Hedges and Grass Verges on Public Roads.
Red Diesel Tax Changes...Can't Use Red Diesel

Common Examples:

  • Racing Studs.
  • Commercial Heating.
  • Joinery or Carpenters.
  • Groundworkers.
  • Solar Farms.
  • Landscapers.
  • Food Production.
  • Stables.
  • Mowing and Tending of Business Land.
  • Engineering.
  • Private Schools.
  • Professional Sport Clubs.
  • Travelling Caterers.
Red Diesel Tax Changes...Your Stored Fuel

If you have any surplus rebated fuel in your storage tanks, that you are no longer able to use, you will need to:

  • Sell or give it to someone who is 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 will need to keep records to show how and when the fuel was disposed of or sold.

You can sell or dispose of the surplus fuel without needing to be approved by HMRC as an RDCO.

Red Diesel Tax Changes...Registered Dealers in Controlled Oil (RDCO)

Although the use of rebated fuel has been significantly restricted, your responsibility as an RDCO has not changed.

You will still need to:

  • Take all necessary precautions to ensure that you supply rebated fuel only to people who will use it as permitted.
  • Familiarise yourself with the changes and establish which customers will be affected.
  • Ensure your customers understand the changes to the rules.
  • Ensure you can show HMRC you’ve taken reasonable steps to supply rebated fuel only to eligible customers.
  • If you will no longer be supplying rebated fuel as a result of these changes, you will need to cancel your registration from the RDCO scheme.
  • Notify HMRC of your disposal plan for rebated fuel and keep records to prove how it was handled.

How can we help?

Contact Us