Almost all the existing uses in commercial operations will no longer be allowed. Other sectors that are affected are construction, utility functions and commercial heating and refrigeration.
The sectors that are allowed to continue to use rebated fuel have been limited to: agriculture; horticulture; fish farming and forestry; rail transport; heating of non-commercial premises, including electricity generation; community amateur sports clubs and golf courses; sailing, boating and marine transport (excluding private pleasure craft in Northern Ireland); and traveling fairs and circuses.
Each sector where use of rebated fuel is allowed has been defined further.
Agriculture, horticulture, fish farming and forestry – retain their permitted use. Agricultural vehicles that cut grass verges and hedges that border a road, snow clearing and gritting and any clear up following a flood where the operation is directly associated with an agricultural operation. Other vehicles that can be used under this heading are classed as ‘special vehicles’. These are digging machines, mobile cranes, mobile pumping vehicles, works trucks. Road rollers, unlicenced vehicles and machines or appliances used for the accepted purposes used within these sectors.
Rail transport – rebated fuel may be used to propel a vehicle or machine designed to run on a railway but not a tramway. This does not allow the use of a vehicle to travel to and from site on a public highway. However, it cannot be used in other machines or equipment used on the railway, such as cooling or heating units.
Heating of non-commercial premises, including electricity generation can continue using rebated fuel for heating and electricity generation, this also includes back-up generators to ensure a continuous electricity supply. These can include buildings used for public service without a fee or for charitable fundraising. Examples include domestic homes, places of worship, NHS hospitals and town halls. Schools and hospitals that charge fees cannot use rebated fuel.
Backup electricity generation and environmental protection – in general, rebated fuel can only be used for power generation in non-commercial premises. However, there is a limited allowance for:
- contingency back-up electricity generation in premises used for commercial purposes;
- critical safety and environmental protection appliances in premises used for commercial purposes.
Community amateur sports clubs and golf courses – agricultural and special vehicles such as diggers, cranes and mowing machines kept or used on the grounds, or on a golf course or range can continue to use rebated fuel. However, this does not include travel to and from the site. Where the land or golf course is either side of a public road, rebated fuel may be used in an agricultural or special vehicle whilst travelling between the two parts by the shortest possible route, providing the vehicle is licensed to be used on the road. Rebated fuel can also be used for heating and lighting of such buildings.
Sailing, boating and marine transport (excluding private pleasure craft in Northern Ireland) – except for private pleasure craft in Northern Ireland, rebated fuel can be used in all types of boat including their engines, and in other machines and appliances permanently on the boat.
Travelling fairs and circuses – vehicles, machines, and appliances associated with travelling fairs and circuses.
USING REBATED FUEL BEYOND 1 APRIL 2022
It will not be possible to put rebated fuel into a vehicle, vessel, machine, or appliance that is not allowed to use it. Any rebated fuel legally put into the vehicle or machine’s tank before 1 April 2022 can be used up by that vehicle after that date, but then must be replenished with duty paid fuel.
EXISTING USERS OF REBATED FUEL ARE NOT BEING EXPECTED TO FLUSH OUT THEIR ROAD TANKS
HMRC has said that it will be carrying out enforcement at the roadside to ensure compliance with the new rules. They are expecting to find traces of markers in the fuels for some time. If stopped enforcement officers may seek evidence of when the vehicle or equipment was last refilled. Vehicles that are entitled to use rebated fuel at present and that are used infrequently, ie, filled up in March but then not used until October, can use that fuel in the road tank.
Operators should keep invoices and receipts of all fuel purchased in the periods before and after 1 April, as well as when the vehicle or machine was last filled. Vehicles and machinery found to be running unlawfully on rebated fuel may be seized by HMRC. If this is found to have been done wilfully then the operator may be subject to civil or criminal sanctions.
STORES OF REBATED FUEL
Operators that store rebated fuel for their own use should run their stocks down as low as possible before 31 March 2022, and not purchase more than will be used before that date. As for road tanks, users are not expected to flush out rebated fuel from their own storage tanks, however Registered Dealers in Controlled Oil (RDCO) are.
Any surplus rebated fuel should be sold or given to someone who is entitled to use it or sold back to a Registered Dealer in Controlled Oil (RDCO) such as a supplier, or disposed of via an approved waste oil recycling or disposal company. Records should be kept of how fuel has been disposed. There is no need to inform HMRC about where the surplus fuel was disposed.
REFILLING WITH REBATED FUEL OUTSIDE THE UK
If a vehicle or equipment is legally refilled with rebated fuel in another country or the Channel Islands (ie for a use which is permitted in that country or jurisdiction), remaining fuel may be used up in the UK. Operators will need to provide evidence to demonstrate that the vehicle or equipment was filled outside the UK; it is not necessary to flush the vehicle’s tank when returning to the UK.
IN CONCLUSION
Operators need to be fully aware of how the changes will affect their operations and what measures they need to implement by the April deadline. Feel free to give Logistics UK Member Advice Centre a call for any specific clarification.
www.logistics.org.uk/mac
