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How will the latest Red Diesel taxation impact your business?

The Government alongside the budget statement last week confirmed the changes to red diesel taxation in response to the consultation that it held on the red diesel tax rebate last year.

The following users will continue to be entitled to use red diesel:

  • The commercial boat operating industry, including but not limited to the fishing and inland water freight industries and passenger ferries.
  • The travelling fairground and circus industries when diesel is used for powering their machinery (including their caravans).
  • Non-commercial power generation (for example hospitals), including households who rely on red diesel for electricity generation in areas not connected to the electricity grid.
  • Amateur sports clubs as well as all golf courses. This includes activities such as ground maintenance and the heating and lighting of the clubhouse and changing rooms. Amateur sports clubs will qualify if they are registered as community amateur sports clubs (CASCs).
  • In agriculture, forestry, horticulture and fish farming. This includes agricultural vehicles used for cutting verges and hedges, snow and flooding clearance and gritting roads.
  • As fuel to propel passenger, freight or maintenance vehicles designed to run on rail tracks.
  • For non-commercial heating. This includes the heating of homes and buildings used for other non-commercial purposes, such as places of worship and townhalls, and heating (and other non-propulsion uses) on permanently-moored houseboats.

Your red diesel storage tank

The Government has decided to implement its proposal to mandate that RDCOs switching a fuel tank from red to white diesel will need to flush out the tank and supply lines until no trace of marked rebated fuel remains. Users of vehicles and machinery losing their red diesel entitlement must ensure that they do not purchase red diesel for use from 1 April 2022 and run down their existing stocks before that date.

No grace period for finishing reserves

Users of red diesel, such as the construction industry will not be allowed to use up old stock after the tax rebate expires on 1st April 2022. Storage tanks must be emptied and flushed out ahead of the deadline so that enforcement inspectors can clearly see the difference between illegal red diesel and standard ‘white’ diesel.

Vehicle and machinery with red diesel already in their tanks on 1st April 2022 will not have to be flushed out. They can be used but any red diesel put into machines after that date will be liable for forfeiture and penalties.

How can we help?

At Moorland Fuels, we are a fully independent fuel distributor sourcing quality products at the most competitive prices. We supply domestic, farming and commercial customers with high-quality fuels. With years of experience with tank cleaning, relpacmenent and decommissioning we can support your business with the changes to red diesel usage.

Get in touch with the team on 01837 55700 or email for more information or to discuss your specific requirements.

The full document on reforms to the tax treatment of red diesel and other rebated fuels can be found here.

The full budget document can be downloaded here.

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