Changes to Red Diesel Regulations
CHANGES TO RED DIESEL REGULATIONS FROM 1ST APRIL 2022
As of 1st April 2022, Onestop Access will only supply engine powered scissor and booms with white diesel or renewable HVO fuel.
This is because the Government announced it would remove the entitlement for most sectors to use red diesel, with the exception of agriculture, horticulture, fish farming, forestry, rail and non-commercial heating system users. This means that any business operating outside of these sectors must use fuel that is taxed at the standard rate for white diesel from 1st April.
As we don’t fall into those exempt categories, we won’t be allowed to use red diesel when we supply machines to you, and we won’t allow customers to re-fill and return machines to us with red diesel.
What you need to do now?
- Be aware that you cannot re-fill and return any machines to us that contain red diesel (if you do, we will have to charge you for our time to drain and clean the tanks).
- Speak to our hire desk team if you’d like to discuss the use of cleaner HVO fuel.
Read on for more details about the changes…
THE CHANGES IN MORE DETAIL
Background
At Budget 2020, the government announced that from the 1st April 2022, it will remove the entitlement for most sectors to use red diesel, with the exception of agriculture, horticulture, fish farming, forestry, rail and non-commercial heating system users. This means that any business operating outside of these sectors must use fuel that is taxed at the standard rate for white diesel.
What is red diesel?
“Red diesel” is the term used for gas oil that is intended for use other than as fuel in road vehicles.
Red diesel is so called because it has been a requirement since 1961 for it to be marked with a red dye as well as chemical markers (other than in circumstances where a technical marking waiver is granted). This is to prevent its misuse in road vehicles.
Red diesel use accounts for 15% of total diesel for the UK. The reduced rate costs around £2.4 billion a year in revenue compared to if duty was charged at the main rate.
What’s changing?
From 1st April 2022, you’ll only be able to use red diesel for the following qualifying purposes:
- for vehicles and machinery used in agriculture, horticulture, fish farming and forestry. This includes allowing vehicles used for agriculture to be used for cutting verges and hedges, snow clearance and gritting roads
- to propel passenger, freight or maintenance vehicles designed to run on rail tracks
- for heating and electricity generation in non-commercial premises – this includes the heating of homes and buildings such as places of worship, hospitals and townhalls; off-grid power generation; and non-propulsion uses on permanently-moored houseboats
- for maintaining community amateur sports clubs as well as golf courses (including activities such as ground maintenance, and the heating and lighting of clubhouses, changing rooms etc.)
- as fuel for all marine craft refuelling and operating in the UK (including fishing and water freight industries), except for propelling private pleasure craft in Northern Ireland
- for powering the machinery (including caravans) of travelling fairs and circuses.
The measure will also extend fuel duty to biodiesel, bioblends and fuel substitutes used in heating, applying the rebated duty rate to non-commercial heating and the full rate of duty to commercial heating. Consequential changes to covering penalties for contravening restrictions on the use of rebated fuels will also be made. The legislation will provide for secondary legislation to enable HMRC to disapply its powers to seize vehicles or other machinery in certain circumstances.
How will it affect your business?
Sectors and applications that don’t fall into the above categories – which includes construction – will no longer be able purchase or use red diesel from 1st April 2022. Together we will need to switch to an alternative fuel, such as white diesel or HVO (Hydrotreated vegetable oil).
Penalties for non-compliance
If vehicles and machinery are found with red diesel marker in fuel supplies after 1st April 2022, they could be seized, as well as the fuel. Fuel used in sectors that are no longer eligible will be liable for fines.
Further information
Visit the UK Government website for more information https://www.gov.uk/government/publications/reform-of-red-diesel-entitlements/reform-of-red-diesel-and-other-rebated-fuels-entitlement