United Kingdom: HMRC Amends Rebated Fuel Use Rules
27 August 2013
Posted by: Author: Amanda Banks
Author: Amanda Banks
Following representations from the UK farming industry, the HM Revenue and Customs has agreed to extend the scope of new legislation that will allow farmers to use rebated red diesel fuel in vehicles used to grit roads during extreme weather.
HM Revenue and Customs previously announced in December that it intended to draft an amendment to the Hydrocarbon Oil Duties Act 1979 ("HODA") to allow any vehicle classified as an "agricultural machine" under the Vehicle Excise Registration Act 1994 to use red diesel when gritting roads. Red diesel is exempt from fuel duty, but it is restricted to vehicles which make only incidental use of public roads for brief and infrequent journeys for specific purposes. HMRC stated in December that other vehicles would not be exempted because of the "over-riding policy objective" of restricting the use of red diesel.
Following this announcement, the Farmers Union of Wales and the National Farmers Union asked for the amendment to be extended to include agricultural material handlers. Such vehicles are normally used solely for agricultural, horticultural and forestry activities and therefore routinely use rebated fuel, but they differ from tractors in that they have built-in lifting equipment.
HMRC has now agreed that such vehicles are also suitable for snow clearance and gritting, and that in some situations they may be the most appropriate vehicle to use.
In contrast, tractors used ordinarily for purposes other than agriculture, horticulture and forestry will not be exempted, as HMRC believes that this would not be compatible with the EU Energy Products Directive (EPD).
HMRC also believes that existing legislation protects the interests of commercial gritters.
HMRC intends for the changes to come into effect in time for the winter. It remains to be seen whether as a result there will be less evidence of the British seasonal tradition of bemoaning "winter chaos" when bad weather strikes.