Duty free diesel?

Obukit

Hi,

Just a quick question, I know you can use up to 2,500 litres of biodiesel you make yourself without paying any duty. However, does anyone know if you can get this duty free if you're buying it from someone else?

On Revenue and Customs website (http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageLibrary_ShowContent&propertyType=document&id=HMCE_CL_000205#P223_24622) they say: -

4.2.1 Exempt producers/users
If you have produced or used less than 2,500 litres of:

• any biofuel, or
• any other fuel substitute or additive

within the last 12 months, and/or expect to produce or use less than 2,500 litres in the next 12 months, you are an exempt producer and do not need to register with HMRC and account for duty. However, there are simple record-keeping requirements, which are described in paragraph 4.9.1.

As far as I'm concerned I'm using biodiesel, therefore I'm a user. Called HMRC and at first the guy tried to tell me that it only applied to producers, until I made him read the actual webpage, and then he tried to say that it only applied to people using straight vegetable oil, not biodiesel, but I think this is just a big lie as there's clearly no distinction made in the notice itself.

If I can't get HMRC to agree I think I might just not pay the duty and let them take me to court, I can't see how they can possibly prosecute me when their own guidance is so ambiguous.

t_r

But if you read 4.2

4.2 When is excise duty payable on biofuels?

The excise duty point for biofuels is the time when they are:

• sent out from entered premises;
• set aside; or
• used as a motor fuel.

I guess this means duty will be charged when you buy it putting the onus on the supplier.

Obukit

But surely that's only the point at which duty should be charged, if necessary. If I'm entitled to a certain amount of a product duty free then it can pass this point without being taxed, as long as it is being "set aside" for a person using less than 2,500 litres a year.

Otherwise I could just buy unfiltered biodiesel that wasn't suitable for use in cars, sign a disclaimer saying that the fuel wasn't road fuel, then filter it and therby "produce" biodiesel. I'd agree this sounds stupid but at the moment HMRC are claiming that someone going into Tescos, buying vegetable oil, and then pouring it into their tank is "producing" fuel because it is being changed from food to fuel by merit of being poured into a vegetable tank.

I'm no accountant but when you consider they exploit every tiny, technical loophole in the law, this seems like a huge hole - common sense dictates that you can't have one set of rules for one alternative fuel, and another set for an almost identical fuel. Surely UK gov should be encouraging biodiesel manufacturers?

headpin

Obukit wrote: »

But surely that's only the point at which duty should be charged, if necessary. If I'm entitled to a certain amount of a product duty free then it can pass this point without being taxed, as long as it is being "set aside" for a person using less than 2,500 litres a year.

Otherwise I could just buy unfiltered biodiesel that wasn't suitable for use in cars, sign a disclaimer saying that the fuel wasn't road fuel, then filter it and therby "produce" biodiesel. I'd agree this sounds stupid but at the moment HMRC are claiming that someone going into Tescos, buying vegetable oil, and then pouring it into their tank is "producing" fuel because it is being changed from food to fuel by merit of being poured into a vegetable tank.

I'm no accountant but when you consider they exploit every tiny, technical loophole in the law, this seems like a huge hole - common sense dictates that you can't have one set of rules for one alternative fuel, and another set for an almost identical fuel. Surely UK gov should be encouraging biodiesel manufacturers?

But how does the supplier of the fuel know how much you may have already had from some other supplier? IMO it would be the suppliers duty to charge the Duty when selling it to you. If you then think you are entitled to a refund as it is witthin your “free” allownace you would need to claim back the Duty you have overpaid from HMRC.

Otherwise you could just move from supplier to supplier using a different name and trying to claim your “free” allowance multiple times.

t_r

Oh just a thought does anyone know where I can purchase an IBC of veg oil. I have a very large chip pan and family ;-)

Andy_L

However the person you get the biodiesel from will have to stay under the 2500l production limit themselves so they will probably have to pay the duty and will then pass the pass the cost on to you.

Pew_Pew_Pew_Lasers!

You haven't dealt with C&E much have you. Here's a suggestion - don't upset them.

Bob63

Pew_Pew_Pew_Lasers! wrote: »

You haven't dealt with C&E much have you. Here's a suggestion - don't upset them.

How true.

HMRC is the b*stard puppy of the Inland Revenue rottweiler breeding with the Customs & Excise pit bull. It has inherited the worst traits of both. And then some...