The legislation concerning rebated fuel is changing on 1 April and it will primarily affect those using red diesel for jobs that are on the periphery of agriculture.
From 1 April 2022, rebated diesel (known as red diesel) and rebated biofuels will no longer be allowed to be used as they are currently.
You will only be able to use rebated fuel for specific purposes, when using certain allowed:
The rebated fuels affected by the changes are:
rebated Hydrotreated Vegetable Oil (HVO)
rebated biodiesel and bioblend
kerosene taxed at the rebated diesel rate
Agriculture, horticulture, fish farming and forestry will retain the use of rebated fuel. It is therefore important to be clear whether work carried out is specifically for an agricultural purpose or not. This is not necessarily the same as just doing work on agricultural land.
HMRC defines agriculture as “the growing and harvesting of crops for food, beverages, fodder, fuel or industrial purposes; or the rearing of animals for the production of food, wool, leather, fur or other substances”.
You can also use rebated fuel in agricultural vehicles when:
Cutting verges and hedges that border a road
Assisting any clear-up following flooding.
Activities accepted by HMRC as falling within the definition of agriculture include:
Breeding or rearing any creature kept for the production of food, wool, skin or fur, or for the purpose of its use in the farming of land
Growing or harvesting crops, including cereals, combinable crops, roots, tubers, vegetables, pulses, fruit, nuts, grasses, oilseeds and fungi for food, beverages, fodder, fuel or industrial purposes or the upkeep of agricultural land such as set-aside under environmental management schemes.
Activities not accepted as falling within the definition of agriculture include:
The breeding, rearing or keeping of any creature for purposes relating to sport or recreation
Dealing in agricultural products
Peat or loam extraction
Exploitation of wild animal or fish stocks
Construction of buildings or other structures used for purposes relating to agriculture
Transportation of agricultural produce, livestock, implements, inputs or waste, other than where this is incidental to an agricultural operation being performed on the land.
If you are uncertain about how the rule changes affect you and your business, please don't hesitate to get in touch for advice.