News Item: HAE Seeks Clarity after Changes to Red Diesel Guidance

Several members are contacting HAE for advice about the changes around Red Diesel from April 2022. We are currently relying on the latest HMRC draft guidance. A link to the document is here and Excise Notice 75 can be viewed here

While some changes were made to guidance to provide clarity, there are still multiple grey areas and HAE is looking at options to provide additional resources to help members to navigate the changes. 

The main changes to the draft guidance include:

  • Extending the scheme under which Commissioners may permit rebated fuel to be used where an amount equal to the rebate has been paid - where a business retains stocks of rebated fuel after 1st April 2022 for use in emergencies or for business critical reasons  
  • To permit use of marked fuel where it was lawfully taken into a vehicle, vessel, machine or appliance outside of the UK from 1st April 2022
  • Amending the definition of agricultural vehicles and the circumstances in which they may use rebated or marked fuel
  • Widening the circumstances in which special vehicles can use rebated or marked fuel  
  • Expanding  the circumstances in which machines or appliances can use rebated or marked fuel

Secondary legislation will be laid out before Parliament in early 2022 to supplement the Finance Act 2021 and the Finance Bill 2021-22 provisions, including making the necessary amendments to relevant statutory instruments. This will include providing for machines used for emergency back-up electricity generation and critical safety or environmental protection equipment to use rebated fuel after 1st April 2022, if the rebated fuel was held for that use before the 10th June 2021 (the date of Royal Assent to Finance Act 2021). 

The guidance has been drafted to include the Finance Bill changes but the guidance may be updated  further. The Excise Note may also be amended.