Fuel for road vehicles

HMRC Reference:Notice 75 (June 2014) View Change History
 

Contents

Foreword

1. Introduction

1.1 What is this notice about?

1.2 What has changed?

1.3 Who should read this notice?

1.4 What law covers this notice?

2. Fuel which may be used in road vehicles

2.1 What fuel can I legally use in a diesel-engined road vehicle?

2.2 Can I use rebated heavy oils as fuel in a road vehicle?

2.3 Can any vehicle use rebated heavy oils as road fuel?

2.4 How do I report details of misuse of rebated heavy oil?

3. Testing of heavy oils

3.1 How do rebated heavy oils differ from fully duty paid fuel?

3.2 Why are rebated heavy oils dyed and/or marked?

3.3 How do you check if fully duty paid fuel is being used?

3.4 Must I make my fuel available for testing?

3.5 Can my fuel be tested in my absence?

3.6 How can I avoid needless delay if my vehicle is chosen for testing?

3.7 Will HMRC officers also test for foreign marked oil?

4. General questions about rebated fuels

4.1 What must I do if I supply or store rebated fuels?

4.2 Does any separate machinery on my road vehicle also have to use fully duty paid fuel?

4.3 Can I store rebated oil in auxiliary (belly) tanks on a vehicle or trailer?

5. The law

5.1 Offences and penalties

5.2 What if I disagree with an HMRC decision?

5.3 Can I appeal against the seizure of my vehicle?

6. Repaying rebate to allow rebated oil to be used on the road

6.1 What is this section about?

6.2 Do I need to be authorised?

6.3 How do I apply?

6.4 What happens then?

6.5 Accounting for the rebate: How do I fill in form HO72?

6.6 What are the accounting periods?

6.7 What must I do if I have to use more oil in an accounting period than my form HO72 showed?

6.8 What if duty rates change in a period?

6.9 What must I do at the end of an accounting period?

6.10 What records must I keep?

6.11 What form must the records take?

6.12 Must I keep my records ready to be inspected?

6.13 Where should I keep my records?

6.14 How long must I keep them?

7. Powers of HMRC Officers

8. Excepted vehicles

8.1 What vehicles can use rebated fuel?

8.2 Unlicensed vehicles not used on public roads

8.3 Tractors

8.4 Light agricultural vehicles

8.5 Agricultural material handlers

8.6 Agricultural engines

8.7 Agricultural processing vehicles

8.8 Vehicles used between different parts of the land

8.9 Mowing machines

8.10 Snow clearing vehicles

8.11 Gritters

8.12 Mobile cranes

8.13 Mobile pumping vehicles

8.14 Digging machines

8.15 Works trucks

8.16 Road rollers

8.17 Road surfacing vehicles

8.18 Tar sprayer

8.19 What is meant by a public road?

8.20 What is meant by agriculture, horticulture or forestry?

8.21 What activities are purposes relating to agriculture, horticulture or forestry?

9. Glossary

10. Memorandum of Agreement

Memorandum of Agreement in respect of the use of agricultural vehicles on the road

Appendix - questions and answers on the use of agricultural vehicles on the road

Your rights and obligations

Do you have any comments or suggestions?

Putting things right

How we use your information

 

Foreword

This notice cancels and replaces Notice 75 of November 2013.

1. Introduction

1.1 What is this notice about?

It is about the fuel you can legally use in a road vehicle.

1.2 What has changed?

This notice was changed in November 2013 when Section 8 was rewritten to reflect changes in the law on the use of red diesel, allowing certain agricultural vehicles to grit roads. Some of the wording in Sections 4, 5, and 6 were amended to improve clarity. This latest change, however, is limited to paragraph 5.1, to which we have added some information on penalties for submitting inaccurate returns.

This will only be of interest if you are one of the few businesses permitted to use rebated fuel on the road on condition that you repay the rebated amount of duty.

1.3 Who should read this notice?

Suppliers and users of rebated fuels and owners of ‘excepted vehicles’ (see paragraph 2.3) that are eligible to use these fuels.

1.4 What law covers this notice?

UK law

  • The Hydrocarbon Oil Duties Act 1979 (HODA),
  • The Customs and Excise Management Act 1979,
  • The Hydrocarbon Oil Regulations 1973,
  • The Hydrocarbon Oil (Repayment of Rebates) Regulations 1996,
  • The Hydrocarbon Oil (Marking) Regulations 2002,
  • The Excepted Vehicles (Amendment of Schedule 1 to the Hydrocarbon Duties Act 1979) Order 2013, and
  • The Hydrocarbon Oil (Marking) (Amendment) Regulations 2007.

Community law

  • Council Directive 92/12/EEC of 25.02.92,
  • Council Directive 95/60/EEC of 27.11.95,
  • Council Directive 98/70 of 13.10.98,
  • Council Directive 2003/96/EC of 27.10.03, and
  • Commission Decision 2001/574/EC of 13.7.01 and Amendments to Commission Decision 2001/574/EC of 8.4.02 and 17.12.03.

Nothing in this notice modifies the law.

2. Fuel which may be used in road vehicles

2.1 What fuel can I legally use in a diesel-engined road vehicle?

Apart from the circumstances described in this paragraph you must always use duty paid fuel.

Certain biodiesel and fuel substitute producers and users, who meet the definition of ‘exempt producers’, can use limited amounts of fuel upon which duty has not been paid. For more details see Section 4 of Notice 179E Biofuels and other fuel substitutes.

2.2 Can I use rebated heavy oils as fuel in a road vehicle?

No. Rebated heavy oils include

  • gas oil, usually marked and dyed, also called red diesel, and
  • kerosene.

It is illegal to use these oils (for example, gas oil or kerosene) as fuel in a road vehicle unless you get a licence from us to pay the difference between the full rate of duty on the fuel and the rebated rate actually paid on the fuel used. Section 6 explains how to do this.

2.3 Can any vehicle use rebated heavy oils as road fuel?

Only vehicles which are specifically excluded from the legal definition of ’road vehicle’ may use rebated heavy oil as road fuel. These are known as 'excepted vehicles' and are listed in Section 8. Unless the vehicle is included in that section it counts as a ‘road vehicle’ and must use fully duty paid fuel.

2.4 How do I report details of misuse of rebated heavy oil?

You can report details of misuse of rebated heavy oil by contacting the Customs Hotline in any of the following ways:

HM Revenue & Customs
Freepost NAT22785
Cardiff
CF14 5GX

3. Testing of heavy oils

3.1 How do rebated heavy oils differ from fully duty paid fuel?

The Excise duty on fully duty paid fuels is much higher than the rates on both gas oil (liable to a rebated rate of duty) and kerosene (liable to a nil rate of duty, also referred to as ‘fully rebated’). Both gas oil and kerosene contain chemical markers. Gas oil is also dyed red. Kerosene is dyed a pale yellow colour.

3.2 Why are rebated heavy oils dyed and/or marked?

To assist identification by our officers if they are misused as fuel in road vehicles.

3.3 How do you check if fully duty paid fuel is being used?

The law gives our road fuel testing officers the power to sample and test the fuel of vehicles. The powers are described in Section 7.

3.4 Must I make my fuel available for testing?

Yes, if one of our officers asks you to.

3.5 Can my fuel be tested in my absence?

Yes, but you will be informed of the test in writing.

3.6 How can I avoid needless delay if my vehicle is chosen for testing?

Make sure your drivers know that our officers may ask for a sample of the vehicle’s fuel.

It is your responsibility to provide a fuel sample or allow one to be obtained. You must make sure that the fuel in any tank on the vehicle is easily accessible, including the removal of any fitted anti-theft devices.

3.7 Will HMRC officers also test for foreign marked oil?

Yes. HMRC will take action against those responsible for the presence of marked oils containing any UK or EU marker chemicals. These include:

  • Coumarin - a UK marker,
  • Quinizarin - a UK marker, and
  • the ‘Euromarker’, Solvent Yellow 124, a marker used in all EU Member States.

4. General questions about rebated fuels

4.1 What must I do if I supply or store rebated fuels?

In most circumstances you must get HMRC approval before you sell red diesel or kerosene. Please see Notice 192 for full details.

Marked gas oil must be stored separately from unmarked oil. Any drum, storage tank or other container or any delivery pump or pipe must bear an indelible notice to the effect that where it contains, or is an outlet for, rebated oil, the oil is not to be used as road fuel.

If you supply marked gas oil or a quantity of marked kerosene exceeding 250 litres you must provide the recipient with a delivery note bearing a statement to the effect that the oil is not to be used as road fuel. If you supply kerosene for heating you should make it clear that the oil is not to be used to fuel any engine.

Notice 192 Registered Dealers in Controlled Oils gives information on the RDCO scheme and the application process.

4.2 Does any separate machinery on my road vehicle also have to use fully duty paid fuel?

You need not use fully duty paid fuel for your separate machinery provided it has its own fuel supply and auxiliary engine separate from the vehicle’s fuel supply and engine. You must use fully duty paid fuel if the vehicle’s fuel supply or engine is used to operate the separate machinery. If your vehicle is allowed to run on rebated fuel because it is an excepted vehicle (see Section 8), any separate machinery can be similarly fuelled.

4.3 Can I store rebated oil in auxiliary (belly) tanks on a vehicle or trailer?

Yes, but only in fuel tanks not capable of connection to the engine used to propel the vehicle (unless it is an excepted vehicle). The standard running tank(s), whether connected or disconnected, must contain only fully duty paid fuel. Rebated gas oil must not be taken into the standard running tanks or auxiliary tanks fitted to vehicles or trailers except where these tanks are solely and permanently connected to the auxiliary machinery (for example, refrigeration motors). All other tanks on a vehicle, trailer or bulk carrier whether directly connected to the propelling engine or not, will be considered to be part of the road fuel system. Dual fuel systems are not permitted, even where they can connect to a power take off to switch the tanks.

5. The law

5.1 Offences and penalties

Offences


You may be liable to


If you:


  • misuse or supply oil (other than fully duty paid fuel) for use as fuel in a road vehicle
  • misuse or supply rebated kerosene for use to propel an excepted vehicle or as fuel in an engine (other than to provide heating)
  • mix any rebated or duty free oil with any oil on which no rebate has been allowed, or
  • fail to provide, or to allow an HMRC officer to obtain, a sample of fuel
  • civil penalties under section 9 of the Finance Act 1994 or an Excise wrongdoing penalty under Schedule 41 of Finance Act 2008
  • your vehicle (or engine) being seized and forfeited
  • if your conduct involves dishonesty, a penalty of up to 100% of the duty evaded may be imposed
  • remove any designated chemical marker of dye from any fuel, or
  • add any substance to the fuel to prevent the chemical marker from being identified
  • an excise wrongdoing penalty under Schedule 41 of Finance Act 2008
  • the goods and oil may be seized and forfeited
  • obstruct one of our officers inspecting premises or vehicles or testing or sampling oil
  • an unlimited fine or imprisonment for up to two years, or both
  • make a false or inaccurate declaration which results in a loss of tax to HMRC.
  • an inaccuracy penalty under Schedule 24 of Finance Act 2007. If you think you have made a mistake in your declaration you should tell us immediately. We may then reduce or even waive the penalty.

In the more serious cases involving dishonesty, criminal action may be taken, and the offender can be fined an unlimited amount or imprisoned for up to seven years, or both.

5.2 What if I disagree with an HMRC decision?

The Finance Act 1994 contains the appeal and review process for Excise decisions. It provides for procedures for challenging the following:

  • the terms offered for restoration of a vehicle (or engine) we have seized,
  • our refusal to restore any vehicle (or engine) we have seized,
  • the imposition of a civil penalty or civil evasion penalty, or
  • the assessment.

The procedures are different depending on what decision or decisions you are challenging. We will tell you what your rights are, when we issue the decision letter.

Challenging restoration decisions and linked decisions

If you are challenging:

  • the terms offered for restoration of a vehicle (or engine) we have seized, or
  • our refusal to restore any vehicle (or engine) we have seized,

and/or, if you are challenging:

  • the imposition of a civil penalty or civil evasion penalty, or
  • the assessment,

you may request a formal review by HMRC. Your request should set out the reasons for your disagreement and must be submitted in writing to your local Officer, within 45 days of our original written decision. If you disagree with the review decision you may appeal to the independent tribunal.

More information about challenging HMRC restoration decisions and linked decisions can be found at www.hmrc.gov.uk

Challenging penalty decisions and assessments

If you are only challenging:

  • the imposition of a civil penalty or civil evasion penalty, or
  • the assessment,

and you disagree with the decision; you may either accept the review offer or appeal to the independent tribunal. If you accept the review offer, but do not agree with the review conclusion you will still be able to appeal to the independent tribunal. More information on HMRC’s review and appeal procedures are available at www.hmrc.gov.uk.

5.3 Can I appeal against the seizure of my vehicle?

The arrangements for challenging the actual seizure of goods liable for forfeiture (rather than HMRC’s decision about whether or not to return them to you) are different from the arrangements outlined at paragraph 5.2.

In such cases, if you disagree with our decision to seize your vehicle (or engine) you can appeal in writing to your local Officer within one month of the date of seizure. We must then bring civil (’condemnation’) proceedings in the courts to determine the matter, and you can challenge the seizure and forfeiture there.

More information on how to challenge the seizure of goods by HMRC can be found in Notice 12A What you can do if things are seized by HMRC which is available at www.hmrc.gov.uk

6. Repaying rebate to allow rebated oil to be used on the road

6.1 What is this section about?

It explains how, in exceptional circumstances, you can repay the rebate on rebated heavy oil and then legally use it as road fuel, or, if the oil is kerosene, as fuel to propel ‘excepted vehicles’ or as fuel in the engine of a road vehicle.

6.2 Do I need to be authorised?

Yes. You must have our licence, known as a ‘red diesel licence’ before you can pay the rebate on rebated heavy oil.

Red diesel licences are primarily designed for 'excepted vehicles' that normally do not travel on public roads at all. We give this authority only where a vehicle must occasionally use public roads in exceptional circumstances, where we accept it would be unnecessarily obstructive to require the user to take the necessary action to avoid using rebated heavy oil on the public road.

Any anticipated use of the public road must be a rare and very limited occurrence. Each application will be judged on its merit, but it is unlikely that we will authorise your application for a licence if you expect to use the public road regularly or as part of a routine.

We are also likely to refuse any applications in respect of vehicles that have no entitlement to use red diesel under any circumstances.

6.3 How do I apply?

Write to:

Mineral Oil Reliefs Centre (MORC)
Building 4, BP4002
Benton Park View
Longbenton
Newcastle upon Tyne
NE98 1ZZ

with details of:

  • all of the vehicles you intend to use on the public road,
  • what these vehicles are normally used for,
  • the category of excepted vehicle under HODA Schedule 1 for each of your qualifying vehicles,
  • the tax class in which each of these vehicles is classified by the Driver and Vehicle Licensing Agency (DVLA). Please indicate also if any of the vehicles are the subject of a Statutory Off Road Notification (SORN),
  • the circumstances in which these vehicles will use the public road and the frequency of that use,
  • the journeys these vehicles are likely to make and the estimated distances these will cover,
  • where the oil is stored (if not at the address shown on your letter),
  • why you cannot use fully duty paid fuel and must use rebated heavy oil,
  • what sort of rebated heavy oil you intend to use as fuel,
  • roughly how much you intend to use each year and when you will start,
  • whether you are likely to use any rebated heavy oil for purposes other than as fuel, and without payment of rebate,
  • the price you are currently paying (including Excise duty) per litre of rebated heavy oil.

6.4 What happens then?

If your application is successful we will send you a licence. The Tax Accounting Centre at Cumbernauld will send you the following forms: HO72 Rebated Heavy Oil to be used as Fuel, and HO73 Rebated Heavy Oil to be used as Fuel: supplementary estimate of volumes of fuel. You must complete Form HO72 and return it to the Tax Accounting Centre with the amount due before you use any rebated heavy oil as fuel.

6.5 Accounting for the rebate: How do I fill in form HO72?

Show the quantity (volume) of rebated heavy oil you estimate you will use as fuel in the first accounting period (follow the notes that accompany the form). Your licence will tell you which accounting periods apply to you. Send the form to the Accounting Centre and pay the duty due in advance of use.

If you intend to continue operating under the licence for second and later accounting periods, also send us a form HO72 before you continue using rebated heavy oil in the new periods.

On each form HO72 show the quantity of rebated heavy oil which you estimate you will use as fuel in that accounting period.

6.6 What are the accounting periods?

Normally, they are the quarters starting on 1 January, 1 April, 1 July and 1 October, but we may licence you to use an annual accounting period, starting on 1 January.

6.7 What must I do if I have to use more oil in an accounting period than my form HO72 showed?

As soon as you have used the volume of oil paid for with form HO72, you must stop using rebated oil as fuel until you have completed form HO73. Show your supplementary estimate of the rebated heavy oil you will use as fuel in the accounting period and send the form to the Accounting Centre. You must pay this estimated duty before you use any more rebated oil.

6.8 What if duty rates change in a period?

If the change increases or decreases the amount of rebate due for a period, you must complete and send in a form HO74 Rebated Heavy Oil used as Fuel: Additional Rebate Payment Form [Event B(1),(2)&(3)]. If you have made payment with form HO72 in that period, the Tax Accounting Centre will send you a form HO74 on Budget Day and you must pay any extra duty due.

6.9 What must I do at the end of an accounting period?

The Tax Accounting Centre will send you form HO75 Rebated Heavy Oil used as Fuel: Return of Rebate due (and paid). Complete it as explained in the notes on the form and return it to the Accounting Centre. We will send you a refund if appropriate.

6.10 What records must I keep?

The law requires you to keep a daily record of all the rebated heavy oil you use as road fuel. You must record the details on the same day as the fuel is used.

Show in the record the registration mark and number of every road vehicle using rebated heavy oil as fuel. Also show for each vehicle:

  • the quantity and description of oil supplied to the vehicle for use as fuel,
  • the date of, and number of miles travelled in, any journey on public roads,
  • the total number of hours the vehicle is used at places when it is not on a journey, and
  • the quantity of oil used in the vehicle while not travelling, for example, to drive machinery or pumps.

You must also keep a record of rebated kerosene used in an engine, or to propel an excepted vehicle, showing the same details as for road fuel. Record these details on the same day that you use the oil as fuel.

6.11 What form must the records take?

You must agree with our officer the permanent form of the records.

6.12 Must I keep my records ready to be inspected?

Yes. If one of our officers asks to see your records, they must be available at any reasonable time. This includes asking to see the licence to use rebated fuel issued by HMRC. We therefore recommend a copy of this licence is carried in all vehicles covered by it.

6.13 Where should I keep my records?

Either at the same place where your vehicles are kept or at any other premises agreed with our officer.

6.14 How long must I keep them?

You must keep them for at least 12 months from the date of the last entry in them.

7. Powers of HMRC Officers

(referred to in paragraph 3.3).

Officers of HMRC are allowed by law to:

  • examine any vehicle and any oil in or on it and to inspect, test or sample any oil in the fuel supply,
  • require vehicle owners or anyone in charge of a vehicle to open or cause to be opened the fuel tank or other source of the fuel supply so that the fuel can be located and inspected, tested or sampled. If there is anything in the supply which might hinder this, it must be removed,
  • require anyone in charge of a vehicle to produce any books or documents relating to the vehicle or to oil carried on it and which are carried by that person or on the vehicle,
  • enter any premises (except private dwelling houses) and inspect, test and sample any oil on the premises, whether in a vehicle or elsewhere. In entering the premises, an officer may bring with him any vehicle used for carrying out official duties,
  • require the occupier of the premises or the person in charge of them to give facilities to inspect, test or sample oil on the premises or oil in the fuel supply of vehicles on the premises, irrespective of whether the oil or the vehicle belongs to that person or someone else, and
  • require anyone concerned with the sale, purchase or disposal of any oil to produce on demand any relevant books or documents.

8. Excepted vehicles

(referred to at paragraphs 2.3 and 4.2).

8.1 What vehicles can use rebated fuel?

Certain categories of vehicle are excluded from the definition of road vehicles, and can therefore use rebated fuel. The different categories of excepted vehicle are explained in the following paragraphs. However, operators should keep abreast of changes to the rules because it is their responsibility to make sure that their vehicles use the appropriate fuel. HMRC therefore recommends that they make regular checks on the HMRC website which publishes details of alterations to the rules and updates to this notice.

8.2 Unlicensed vehicles not used on public roads

A vehicle that is not used on the public road and has no licence under the Vehicle Excise and Registration Act 1994 is an excepted vehicle. If a vehicle has become untaxed since 31 January 1998 it requires a Statutory Off-Road Notification (SORN). Such vehicles will be eligible to use red diesel if a SORN declaration has been made. Unlicensed vehicles that do not require a SORN (including unregistered vehicles that have never used the public road) will continue to be able to use red diesel without a SORN declaration if kept off-road.

Under DVLA rules, a vehicle with a SORN declaration in place may only use the public road to travel to and from a licensed station for a pre-arranged MOT, vehicle identity check, or weight or emissions test.

Unregistered or unlicensed vehicles are not permitted to run on public roads unless they are travelling to and from a pre-arranged mandatory Department for Transport (DfT) test or re-test. HMRC will take action if such a vehicle is found on public roads using red diesel at any other time. Other offences beyond the scope of HMRC responsibility may also be committed if such a vehicle runs on public roads, even if road fuel (‘white diesel’) is being used.

8.3 Tractors

To qualify as an excepted vehicle, the tractor must be an agricultural tractor designed and constructed primarily for use otherwise than on roads. It must not be used on public roads except for:

(a) purposes relating to agriculture, horticulture or forestry,

(b) cutting verges bordering public roads,

(c) cutting hedges or trees bordering public roads or bordering verges which border public roads,

(d) from 01 November 2013, gritting of roads, including travel to and from where gritting takes place, and for the collection of equipment and material for gritting.

See paragraph 8.21 for what we mean by activities falling within agriculture, horticulture or forestry.

If a tractor has a vehicle Excise licence as a general haulage vehicle it cannot use red diesel as a fuel either on or off public roads, regardless of whether it is undertaking agricultural, horticultural or forestry work. This is because it is licensed to perform other work and is therefore assumed to exceed the permitted activities listed above.

8.4 Light agricultural vehicles

To qualify under this category the vehicle must:

(a) have a revenue weight not exceeding 1,000 kilograms,

(b) be designed and constructed so as to seat only the driver,

(c) be designed and constructed primarily for use otherwise than on roads, and

(d) be used only for purposes relating to agriculture, horticulture forestry or for gritting roads

The revenue weight of a vehicle is either the maximum weight of the vehicle or the design weight as defined in section 60A of the Vehicle Excise and Registration Act 1994.

Quad bikes and similar single-seater machines used for agricultural, horticultural or forestry work fit into this category.

8.5 Agricultural material handlers

To qualify as an agricultural material handler, the vehicle must be designed to lift goods or burden and be designed and constructed primarily for use otherwise than on roads.

Agricultural material handlers must not be used on public roads except for:

(a) agricultural, horticultural or forestry work,

(b) cutting verges bordering public roads,

(c) cutting hedges or trees bordering public roads or bordering verges which border public roads, or

(d) since 1 November 2013, the gritting of roads, including travel to and from where gritting takes place and for the collection of equipment and material for gritting.

8.6 Agricultural engines

This category is restricted to purpose-built vehicles that:

(a) are designed and used solely for purposes relating to agriculture, horticulture or forestry,

(b) are used on public roads only for proceeding to and from the place where the vehicle is to be or has been used for those purposes, and

(c) when so proceeding do not carry any load except such as is necessary for its propulsion or for the operation of any machinery built-in or permanently attached to the vehicle.

This category includes but is not limited to combine harvesters, crop sprayers, forage harvesters and pea viners.

8.7 Agricultural processing vehicles

These are specialist agricultural vehicles that:

(a) are used for the conveyance of built-in machinery for processing agricultural, horticultural or forestry produce that is used while the vehicle is stationary,

(b) are used on public roads only for proceeding to and from the place where that machinery is to be used, and

(c) when so proceeding do not carry any load except such as is necessary for their propulsion or for the operation of the processing machinery.

This category includes mobile seed cleaning machines or feed milling machines.

8.8 Vehicles used between different parts of the land

A vehicle in this category must:

(a) be used only for purposes relating to agriculture, horticulture or forestry,

(b) be used on public roads only in passing between different areas of land occupied by the same person,

(c) not travel a distance on public roads in passing between two such areas that exceeds 1.5 kilometres, and

(d) have a nil licence (as defined in Section 62 of the Vehicle Excise and Registration Act 1994) in force.

8.9 Mowing machines

The mowing machine must be a complete vehicle, whether pedestrian-operated or ‘ride-on’. The machinery must be built into the vehicle for it to qualify under this category.

8.10 Snow clearing vehicles

A vehicle is an ‘excepted vehicle’ when it is being used to clear snow from public roads by means of a snow plough or similar device (whether or not forming part of the vehicle) or when it is travelling to or from the place where it is to be or has been used for that purpose.

8.11 Gritters

A vehicle in this category must be constructed or adapted, and used, solely for the conveyance of machinery for spreading material on roads to deal with frost, ice or snow (with or without articles or material used for the purposes of the machinery).

Many of these vehicles are converted HGVs that are used as gritters in the winter months. If the gritting equipment is fitted in a workshop and is attached for the duration of the winter, the vehicle is deemed to meet the requirements of the law as being used ‘solely’ for gritting.

The following do not qualify in this category:

  • vehicles towing gritting equipment mounted on trailers,
  • vehicles into which gritting equipment is merely dropped or held in place with straps,
  • drop-sided vehicles carrying grit or other suitable material for manual spreading.

Some agricultural vehicles may use red diesel when gritting roads. See paragraphs 8.3, 8.4 and 8.5.

8.12 Mobile cranes

A vehicle in this category must be designed and constructed as a mobile crane which:

(a) is used on public roads only as a crane in connection with work carried out at a site in the immediate vicinity of where it is being used or for the purpose of proceeding to and from the place where it is to be used,

(b) when so proceeding does not carry any load except such as is necessary for its propulsion or the operation of built-in lifting apparatus, and

(c) has a revenue weight exceeding 3,500 kilograms.

The category does not include load carrying vehicles such as vans with access platforms.

Where a mobile crane is dependent on another vehicle only for transport to and from the place where it will be used, whether carried or trailer-mounted, the crane itself may use red diesel, but the carrier or towing vehicle has no red diesel entitlement.

8.13 Mobile pumping vehicles

A vehicle in this category is one which:

(a) is constructed or adapted for use and used for the conveyance of a pump and jib,

(b) is used on public roads only when the vehicle is stationary and the pump is being used to pump material from a point in the immediate vicinity to another such point or when proceeding to or from a place where the pump is to be or has been used, and

(c) when so proceeding does not carry the material that is to be or has been pumped or any other load except such as is necessary for the propulsion or equipment of the vehicle or for the operation of the pump.

The pump and jib must be built in as part of the vehicle. The material pumped must be delivered to a desired height or depth through piping that is attached to the pump and jib and is raised or lowered to that height or depth by operation of the jib.

Vehicles without boom-mounted pumps such as mobile batching plants are not in this category nor are load carrying vehicles fitted with boom-mounted pumps, such as gully-suckers.

8.14 Digging machines

To qualify in this category the vehicle must be designed, constructed and used for the purpose of trench digging or any kind of excavating or shovelling work. It must only use the public road for that purpose or for the purpose of proceeding to and from the place where the vehicle is to be or has been used for that purpose. When so proceeding it must not carry any load except such as is necessary for its propulsion or equipment.

Digging machines may include earth scraping machines, mobile drilling rigs and road planing or abrading machines used to remove the road surface. A tractor mounting a permanently-attached front shovel may also be classed as a digging machine. Shot–blasting vehicles used to remove paint or other material from the surfaces of bridges, girders and the like do not qualify.

Where digging machines or drilling rigs are transported on another vehicle, the combination of digging equipment and transport would qualify in the digging machine category only where the transporting vehicle was designed and constructed solely to accommodate and facilitate the operation of the specific digging or drilling unit.

To meet this requirement, the transporting vehicle must have purpose-built provision for loading and unloading the specific unit, have any necessary ancillary equipment permanently fitted, have no additional load carrying capacity, and must necessarily remain connected to the unit while it is in use. Vehicles adapted for the purpose of transporting a digging machine or drilling unit do not qualify.

Where a digging machine or drilling unit is dependent on another vehicle only for transport to and from the place where it will be used, whether carried or trailer-mounted, the digging equipment itself may use red diesel, but the carrier or towing vehicle has no red diesel entitlement.

8.15 Works trucks

To qualify as a works truck the vehicle must be a goods vehicle designed for use in private premises. It must only be used on public roads:

(a) for carrying goods between private premises and a vehicle on a road within one kilometre of those premises,

(b) in passing from one part of private premises to another,

(c) in passing between private premises and other private premises in a case where the premises are within one kilometre of each other, or

(d) in connection with road works at the site of the works or within one kilometre of the site of the works.

In the context of this category a goods vehicle is a vehicle constructed or adapted for use and used for the conveyance of goods or burden of any description (whether in the course of trade or not).

Typical works trucks include fork lift trucks, ‘shunt’ vehicles designed to haul articulated trailers and their goods around sites and special vehicles which lift and move freight containers around sites. Typically, the vehicle will have a maximum speed well below road traffic speeds of 30 mph+ and will lack many of the features, such as braking and lighting systems, required under the Road Traffic Act 1988.

A tractor towing a trailer is not a works truck.

8.16 Road rollers

Self-propelled vehicles with one, two or three drums and walk-behind rollers qualify in this category.

8.17 Road surfacing vehicles

A vehicle in this category is one which:

(a) is designed and constructed to perform an operation necessary to construct or restore the surface of a road,

(b) does not carry any load on a public road except as is necessary for its propulsion or for the operation of any machinery built-in or permanently attached to the vehicle, and

(c) has a maximum speed not exceeding 20 kilometres per hour.

Vehicles such as asphalt pavers qualify in this category.

8.18 Tar sprayer

To qualify in this category, the tar sprayer must be constructed or permanently adapted, and used solely for spraying tar on to the road or for proceeding to and from the place where it is to be or has been used for that purpose.

Hot boxes used to transport and maintain tar at a desired temperature do not qualify in this or any other category.

8.19 What is meant by a public road?

A public road is one which is maintained at the public expense.

8.20 What is meant by agriculture, horticulture or forestry?

HMRC applies the following definitions of agriculture, horticulture and forestry:

Agriculture - the science and art of cultivating the soil, growing and gathering in crops, and rearing of livestock.

Horticulture - the science and art of cultivating or managing gardens, including the growing of flowers, fruits and vegetables.

Forestry - the science and art of forming and cultivating forests and the management of growing timber.

8.21 What activities are purposes relating to agriculture, horticulture or forestry?

When it changed the rules on red diesel entitlement in January 2007, the government commissioned HMRC and industry representatives to jointly establish and publish a code of practice defining purposes relating to agriculture, horticulture or forestry. This led to the publication on 10 January 2008 of the Memorandum of Agreement in respect of the use of agricultural vehicles on the road, signed by HMRC, DVLA, the National Farmers Union, the National Association of Agricultural Contractors, and the Confederation of Forest Industries. The Memorandum is reproduced at Section 10.

9. Glossary

Term


Definition


Duty


Government tax imposed on products such as hydrocarbon oil.


Excepted vehicle


A vehicle eligible to use rebated fuel - listed in Section 8.


Gas oil


A heavy oil which carries a lower (rebated) rate of duty. It is also commonly known as ’red’, ’red diesel’ (because of the red dye) or ’marine gas oil’.


Heavy oil


Oils such as aviation kerosene, fuel oil, gas oil, kerosene, SFD and ULSD. By definition any oil which does not meet the criteria for classification as a light oil. The criteria are based on boiling point, and the temperature at which vapours are given off.


Kerosene


A heavy oil also known as burning oil or paraffin. Kerosene carries a nil rate of duty (fully rebated) when used as a heating fuel.


Marker


A chemical added to oil to indicate Excise duty at rebated rate has been paid, and consequently that oil is not to be used as fuel for road vehicles. A dye is usually used with the marker so that rebated oil can be easily identified. The current gas oil dye is a red colour.


Public roads


Roads maintainable at public expense.


Rebate licence


A licence to use rebated heavy oil as road fuel, issued by HMRC.


Rebated heavy oils


Usually gas oil or kerosene. These are heavy oils that carry a lower rate of duty than that for fully duty paid fuel such as SFD, ULSD, gasoline, liquid petroleum gas (LPG) or compressed natural gas (CNG). There are restrictions on how rebated heavy oils can be used.


Sulphur Free Diesel (SFD)


A more environmentally-friendly fuel than earlier types of diesel, with a maximum sulphur content of 10 parts per million.


Ultra Low Sulphur Diesel (ULSD)


A more environmentally-friendly fuel than earlier types of diesel, with a maximum sulphur content of 50 parts per million.


Vehicle licence


The vehicle Excise licence - sometimes called a ‘tax disc’ or ‘road fund’ licence - issued under the Vehicle Excise and Registration Act 1994 by the Driver and Vehicle Licensing Agency (DVLA) or its agents.


10. Memorandum of Agreement

Memorandum of Agreement in respect of the use of agricultural vehicles on the road

Parties to the agreement

In consideration of the need for clearly understood and easily applied guidelines on the use of agricultural vehicles on road, and the need for these guidelines to respect the intent of the law whilst minimising regulatory burdens on the agricultural, horticultural and forestry industries, the following Government departments and agencies and industry associations have reached a common position on how legislation shall be interpreted and applied:

HM Revenue & Customs
Driver Vehicle Licensing Agency
National Farmers Union
National Association of Agricultural Contractors
Confederation of Forest Industries

The purpose of this Memorandum of Agreement is to provide guidance to those engaged in agriculture, horticulture and forestry, and to agencies enforcing compliance with the legislation. Where disputes arise these will continue to be considered on an individual basis with regard to the relevant legislation and any definitive interpretation of the law would remain to be given by the courts.

Scope of agreement

This memorandum of agreement is restricted to the use of agricultural vehicles by the occupier of the land or the owner of the crop, or to a contractor or other person engaged to perform an agricultural, horticultural or forestry operation on the land.

The agreement applies to the following types of vehicle:

  • agricultural tractors
  • agricultural engines
  • agricultural material handlers
  • light agricultural vehicles
  • vehicles used between different parts of land.

Definitions of these vehicles, for hydrocarbon oils duty purposes, can be found in Schedule 1 to the Hydrocarbon Oil Duties Act 1979, as amended.

Definitions of agricultural vehicles, for vehicle Excise duty purposes, can be found in Schedule 2 to the Vehicle Excise Registration Act 1994, as amended.

Vehicles covered by this agreement are:

  • exempt from vehicle Excise duty (VED)
  • entitled to use rebated gas oil (red diesel).

when used on public roads solely for purposes relating to agriculture, horticulture or forestry.

Other classes of vehicles that are exempt from VED or entitled to use red diesel are not covered by this agreement.

In the case of agricultural engines use of red diesel is restricted to proceeding to and from a place where the vehicle is to be used or has been used for these purposes. When so proceeding the vehicle may not carry any load except such as is necessary for its propulsion or the operation of any machinery that is built-in or permanently attached. Examples of acceptable loads that can be hauled by agricultural engines include the header of a combine harvester or a bowser for a crop sprayer.

In the case of vehicles nil-licensed for limited use between different parts of land, use of public roads is restricted to passing between different areas of land occupied by the same person where the distance travelled on public roads in passing between any two such areas does not exceed 1.5 kilometres.

In addition to use for purposes relating to agriculture, horticulture or forestry, agricultural tractors and agricultural material handlers may also be used for:

(a) cutting verges bordering public roads

(b) cutting trees or hedges bordering public roads or bordering verges which border public roads.

Activities accepted as falling within the definition of agriculture, horticulture or forestry include the:

  • breeding or rearing of any creature kept for the production of food, wool, skin or fur, or for the purpose of its use in the farming of land
  • growing or harvesting of crops including cereals, combinable crops, roots, tubers, vegetables, pulses, fruit, nuts, grasses, oilseeds and fungi for food, beverages, fodder, fuel or industrial purposes
  • growing or harvesting of flowering or ornamental plants
  • growing or harvesting of timber or other forestry products
  • upkeep of agricultural land such as set aside under environmental management schemes.

Activities not accepted as falling within the definition of agriculture, horticulture or forestry include:

  • The breeding, rearing or keeping of any creature for purposes relating to sport or recreation.
  • Dealing in agricultural, horticultural or forestry products.
  • Landscaping.
  • The maintenance of recreational facilities, including beaches.
  • Flood protection.
  • Peat or loam extraction.
  • The exploitation of wild animal or fish stocks.
  • Construction of buildings or other structures used for purposes relating to agriculture, horticulture or forestry.
  • Transportation of agricultural, horticultural or forestry produce, livestock, implements, inputs or waste, other than where this is incidental to an agricultural, horticultural or forestry operation being performed on the land. Accepted transportation uses are as set out under this agreement.

Subject to restrictions in the definition of the particular type of vehicle, agricultural vehicles may use red diesel on public roads and will maintain exemption from vehicle Excise duty in the following circumstances.

Movement of machinery

  • Travel to and from a place where the vehicle is to be used or has been used solely for agricultural, horticultural or forestry purposes.
  • Transport of trailed or mounted agricultural, horticultural and forestry implements, and of equipment or inputs required for the operation of such an implement, as part of an agricultural, horticultural or forestry operation. This does not include the towing of personal accommodation.
  • Transport of agricultural, horticultural or forestry machinery, and equipment or inputs required for the operation of such machinery, as part of an agricultural, horticultural and forestry operation. This does not include the transportation of vehicles for personal transport in an agricultural trailer.
  • Taking agricultural vehicles and trailed or mounted implements to be serviced or repaired.
  • Delivery or collection of an agricultural vehicle used solely for agricultural, horticultural, or forestry purposes that has been bought, sold or hired.

Movement of machinery by dealers and others not engaged in agriculture, horticulture or forestry is not covered by this agreement.

Movement of produce and livestock

  • Transportation of agricultural, horticultural or forestry produce within or between different areas of land occupied by the same person.
  • Transportation of livestock within or between different areas of land occupied by the same person.
  • Transport of agricultural, horticultural or forestry produce from the place of production or temporary storage.
  • Transport of livestock to a place where the produce is to be sold or slaughtered.

The transportation of produce must be incidental to an agricultural, horticultural or forestry operation being performed on the land. The onus is on the person transporting the load to demonstrate that this is the case. Transportation of produce which requires an Operator’s Licence may not be accepted as being incidental.

Transportation on public roads of produce or livestock by a contractor employed solely for that purpose is not included within this agreement.

Movement of agricultural, horticultural and forestry inputs

Collection of inputs and equipment to be used as part of an agricultural, horticultural or forestry operation, and transport within or between different areas of land occupied by the same person of inputs and equipment to be used as part of an agricultural, horticultural or forestry operation.

This includes:

  • hand tools
  • fertilisers (including farm produced manures and slurries)
  • pesticides
  • seed
  • animal bedding, feed and water
  • fencing materials
  • road plans for the repair of unsealed tracks.

This does not include:

  • household furniture or fittings
  • supplies required for domestic use
  • organic waste for disposal on agricultural land.

Movement of waste etc

  • Movement of agricultural, horticultural or forestry waste, within and between different parts of land occupied by the same person. The waste should have been produced by the occupier of the land.
  • Transport of agricultural, horticultural or forestry waste from the place where the waste was produced to a place where it is to be collected by a licensed waste carrier (or to a licensed waste disposal site if nearer). This includes inorganic waste such as plastic packaging.
  • Clearing the road after agricultural, horticultural or forestry operations.
  • Snow clearing to restore access.

Appendix - questions and answers on the use of agricultural vehicles on the road

When can I use red diesel in my tractor?

You can use red diesel in your tractor for any activity, if it does not involve going on the public road.

If you do take your tractor on the public road, you can use red diesel so long as the tractor is designed and constructed for off-road use and you take it on the road only for:

(a) purposes relating to agriculture, horticulture or forestry;

(b) cutting verges bordering public roads;

(c) cutting hedges or trees bordering public roads or bordering verges which border public roads

(d) gritting roads.

What are ‘purposes relating to agriculture’?

In our view, agriculture is the growing and harvesting of crops, and the rearing of animals for the production of food, wool, leather, fur or other substances. The keeping or breeding of animals for leisure (breeding dogs or racehorses for example) is not agriculture. The growing of plants for other reasons is not agriculture, but will sometimes be horticulture - see question 4. Using a tractor for ‘purposes relating to agriculture’ includes using it to:

  • transport agricultural ‘inputs; such as feed, fertilizer, fence posts, and so on for use on your farm (by ‘your farm’, we mean the farm that you own or manage, but also the farm where you work)
  • take your produce and livestock to market or for processing (including slaughter)
  • move produce and livestock between your farm and an associated storage facility
  • transport material to be used for maintaining or improving your farmland (including drainage pipes)
  • transport materials to repair and maintain your farm buildings (other than the farmhouse itself)
  • deliver agricultural waste from your farm to a waste tip
  • transport vehicles and equipment for use on your farm.

What are purposes relating to horticulture?

In our view, horticulture is the cultivation and management of gardens (including vegetable plots, allotments and market gardens, but also flowerbeds , trees, shrubberies and ornamental lawns in public parks). By cultivation and management, we mean growing and tending flowers, lawns, shrubs and trees, and harvesting flowers, fruits and vegetables for food (or animal fodder) and for ornament, as well as treating and enriching the soil and controlling weeds and pests. However, we do not regard as horticulture the landscaping and maintenance of grassy recreational areas, such as playing fields and golf courses, or the grassed areas of parks that are made available for walks, picnics and general recreation. Using a tractor for purposes relating to horticulture includes using it to:

  • travel to and from a place where it will be used for horticulture
  • transport trailed or mounted implements to be used for horticulture
  • take your horticultural produce to a market or to a place where it is to be sold or processed
  • move your horticultural produce between the place where it is grown and an associated storage facility
  • deliver horticultural waste from the place of production to a waste tip
  • transport horticultural inputs such as seed, fertiliser, pesticides and so on for use in your own garden or in land set aside for horticulture.

What are purposes relating to forestry?

In our view, forestry is the upkeep and management of forests including the growing and harvesting of timber and other forestry products. Using a tractor for purposes relating to forestry includes using it to:

  • travel to and from a place where it will be used for forestry
  • transport trailed or mounted forestry implements and machinery to and from the place they will be used for forestry
  • move timber that you (or your co worker) have harvested from where it was harvested to the place where it is to be stored, sold or processed.

Agriculture - what if it is not my farm?

If you have been contracted to carry out agricultural work at a farm, and use red diesel in your tractor to travel to and from the farm, that is permitted so long as you are going to use your tractor for that work or are using it to carry the materials or equipment that you will need there or to remove any produce or waste resulting from your work. You can also use red diesel when you go home or return to your premises at the end of your day’s work. If you do not work on the farm, and you are not going there to carry out agricultural work, you cannot use red diesel.

So, for example, you cannot use red diesel:

  • if you are a dealer in farming equipment or materials and deliver goods to a farmer that the farmer has leased or purchased from you. The same applies if you lend equipment to a farmer (even if you are a farmer yourself)
  • if you are a haulier, to transport something to or from a farm.

On the other hand, if you have been engaged by the farmer to carry out an agricultural processing operation (for example to slaughter animals) you may use red diesel both to collect the material to be processed and to return the finished product to the farmer.

I am going to use my tractor to remove or collect waste material resulting from non-agricultural activities and deliver it for agricultural use on a farm. Can I use red diesel on the public road?

If you are collecting and delivering the waste for agricultural use on your own farm, or the farm on which you work, you may use red diesel. You may only deliver waste materials to another farm if they are purely for use in agricultural work that you will be carrying out there. You may not use red diesel if you were involved in producing the waste material.

I have been engaged by the forestry commission to clear felled timber following a forestry operation along forestry roads. I will be using my tractor. Can I use red diesel on the public road?

Yes, we consider that to be harvesting the timber and therefore related to forestry.

I have been using my tractor to cut hedges and trim verges bordering the public road. Can I continue using red diesel to remove the trimmings and cuttings?

Yes, we regard that as part of the cutting and trimming activities.

I have a gardening business. I use my tractor to cut and treat the grass, get rid of weeds, cut hedges and perform tree surgery. I take my tractor on the public road to travel to and from where it will be used and I also go on the public road to reach the outer parts of the trees and hedges. Can I use red diesel on the public road?

Yes, cultivating and managing gardens is horticulture and so your tractor would be on the public road for a purpose relating to horticulture.

I use my tractor for maintaining the grass on sports fields and recreational areas. Can I use red diesel when travelling to and from my work on the public road?

No, in our view, the preparation and maintenance of grassed areas intended for sport and recreational use is not horticulture.

I have a self-propelled mower that I use for cutting grass on sports and playing fields. Can I use red diesel to go there on the public road?

Yes, mowing machines may use red diesel at all times.

I use my tractor to keep the trees and vegetation under control in a piece of wasteland. Can I use red diesel when I go there on the public road?

No, that would not be agriculture, horticulture or forestry.

I run a horse riding stables/livery yard. I use a tractor to move straw and manure in and out of the premises. Can I use red diesel on the public road?

No. The keeping of animals for sport and recreation is not agriculture.

I use an agricultural tractor for ditch clearing and drainage work. Can I use red diesel on the public road?

Yes, but only if the work is for the benefit of land used for agriculture, horticulture or forestry.

I use my tractor to build flood defences. Can I use red diesel on the public road?

No, flood protection is not one of the activities for which red diesel is permitted.

I use my tractor to spread grit on the public road to deal with snow and ice. Can I use red diesel?

Yes, you can. You can also use red diesel to travel to and from the site of the gritting and to collect and return gritting equipment and material.

I use my 4 x4 for transporting fertilizer on my farm. I only take it on the public road for short distances between different parts of my farm. Can I use red diesel on the public road?

Yes, so long as each journey does not exceed 1.5 kilometres and your vehicle has a ‘nil licence’ and is licensed by the DVLA for use between different parts of land.

I use my 4 x 4solely for agricultural purposes. I use it on my farm but also at my neighbour’s farm across the (public) road. Can I use red diesel?

No, the exemption for use on the public road between different parts of land applies only if the different parts are occupied by the same person.

I have a mobile seed (or feed) processor which has built-in processing machinery. Can I use red diesel when I take it on the public road?

Yes, ‘agricultural processing vehicles’ may use red diesel providing they do not carry any load except what is needed for propulsion or for the operation of the processing machinery.

Can I fit extra tanks to my tractor to allow it to run on white diesel on the public highway?

No. Dual tank systems that can switch from a red diesel to a white diesel tank are not permitted.

Your rights and obligations

Your Charter explains what you can expect from us and what we expect from you. For more information go to https://www.gov.uk/government/publications/your-charter

Do you have any comments or suggestions?

If you have any comments or suggestions to make about this notice, please write to:

HM Revenue & Customs
Excise Oils Policy
3rd Floor
Ralli Quays West
3 Stanley Street
Salford
M60 9LA

Please note this address is not for general enquiries.

For your general enquiries please phone our Helpline 0300 200 3700.

Putting things right

If you are unhappy with our service, please contact the person or office you have been dealing with. They will try to put things right. If you are still unhappy, they will tell you how to complain.

If you want to know more about making a complaint go to www.hmrc.gov.uk and under quick links, select Complaints and appeals.

How we use your information

HM Revenue & Customs is a Data Controller under the Data Protection Act 1998. We hold information for the purposes specified in our notification to the Information Commissioner, including the assessment and collection of tax and duties, the payment of benefits and the prevention and detection of crime, and may use this information for any of them.

We may get information about you from others, or we may give information to them. If we do, it will only be as the law permits to:

  • check the accuracy of information
  • prevent or detect crime
  • protect public funds.

We may check information we receive about you with what is already in our records. This can include information provided by you, as well as by others, such as other government departments or agencies and overseas tax and customs authorities. We will not give information to anyone outside HM Revenue & Customs unless the law permits us to do so. For more information go to www.hmrc.gov.uk and look for Data Protection Act within the Search facility.

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$START-DATA$ title=Fuel for road vehicles^ summary=Suppliers and users of rebated fuels, and owners of 'excepted vehicles' will be interested in the contents of this Notice.^ doctype=PublicNotice^ date=04-Jun-2014^ author=WM6014265^ $END-DATA$
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