Changes to Red Diesel Taxation

Changes to Red Diesel Taxation
Are you ready?

In the March 2021 budget, the Government announced forthcoming changes to Red Diesel taxation, with plans to withdraw tax relief for Red Diesel for several sectors and user groups. Here’s a short overview of the changes and the potential implications for your business.

Act Now

Most machines, vehicles and appliances will lose their eligibility to use rebated (red) diesel and rebated biofuels from 1st April 2022. Instead, rebated fuel use will be limited to certain vehicles, vessels, machines, and appliances when used for specific purposes such as those used in agriculture, horticulture, forestry, and fish farming.

If you are no longer able to use rebated fuel, you should plan to run down the fuel in your vehicles, machines or appliances to as close to nil as reasonably practicable before 1st April 2022. Vehicles, machines or appliances found running on rebated fuel unlawfully are liable to seizure. HMRC officers will have the discretion not to seize if the user can satisfy HMRC, through invoices/receipts, that they did not put rebated fuel into the fuel tanks after the rules changed.

Large fuel infrastructures which cannot use their stock prior to April 2020 should have their stored fuel uplifted and safely removed from site. Whilst it is not compulsory for fuel users to have fuel tanks cleaned and pipework flushed prior to new product entering the tanks, it is best practice to do so. The new fuel should be white diesel or a synthetic diesel alternative which vastly reduces emissions.

  • Red Diesel cannot be used in non-roadgoing or stationary engines from 1st April 2022.
  • Machinery can be seized if Red Diesel remains beyond 1st April 2022.
  • Whilst it is not compulsory, it is best practice for tanks and pipework to be cleaned prior to new product being delivered.
  • The new fuel should be white diesel or a synthetic diesel alternative.
Which industries will be affected by red diesel changes?

The following industries will no longer be permitted to use RED Diesel as a rebated fuel from 1st April 2022:

  • Construction
  • Road Maintenance
  • Logistics and haulage
  • Mining and quarrying
  • Oil and gas extraction
  • Waste management
  • Commercial heating
  • Airport operations
  • Manufacturing
Our Services include:
  • Fuel uplifts
  • Fuel transfer
  • Tank cleaning/pipework flushing
  • Fuel cleaning to specification
  • Fuel sampling
  • Supply and installation of fixed fuel polishing systems that are suitable for red/white diesel or greener alternative fuels like HVO and GTL
  • Tank decommissioning
  • New tank installations
Industries exempt from the changes to Red Diesel taxation include but not limited to:
  • Vehicles and machinery used in agriculture, horticulture, forestry and fish farming
  • Rail including passenger, freight and maintenance vehicles that run on rail tracks
  • Non-commercial heating and electricity generation (such as town halls)
  • Sailing, boating and marine transport (excluding private pleasure craft in Northern Ireland)
Changes to Red Diesel Taxation

Contact our Fuel and Power Management team for further information and to find out how best we can help you prepare prior to the legislation coming into effect.
0333 444 0004
[email protected]

Date Posted: 04/03/2022


REDS Group