HCOBIG3300 – Background: Duty rates
Biofuels
Duty rates for biofuels are available on the HMRC website.
At the time of writing, biodiesel and bioethanol have an
excise duty rate of 20 pence per litre less than the sulphur-free
diesel/sulphur-free petrol rates. However in order to qualify for
these lower rates these products must be shown to fully meet the
relevant fiscal definitions.
Bioblend and bioethanol blend are taxed according to the
ratio of biodiesel and bioethanol in the blends.
For example – 5% @ biodiesel rate and 95% @ SFD rate.
Producers must be able to support the apportionment from their
production and blending records. The proportions are to be
calculated to the nearest 0.001%.
Under the
Hydrocarbon Oil Duties Act 1979 Sections 6AB(5)
and 6AE(5) we can charge the total volume of blends at the rate for
the heavy oil used where we are not satisfied with the separately
declared portions.
Biodiesel used for off-road purposes has its own published
duty rate. Off-road users will have to pay the full biodiesel rate
and reclaim the difference.
The procedure for obtaining repayments is set out in
Notice 179E
Fuel substitutes
Under Section 6A of HODA Fuel substitutes are charged at the
same duty rate as the hydrocarbon oil to which they are most
closely equivalent and for which they are used as a substitute.
The rates of duty for fuel substitutes are set out in the
Other Fuel Substitutes (Rates of Excise Duty etc) Order
1995 Section 4.
The rates of excise duty for fuel substitutes
- for use with a diesel engine is that of Sulphur Free Diesel (SFD)
- for use with a petrol engine powered by leaded petrol is that of light oil (other than ULSP or SFP)
- for use with a petrol engine powered by unleaded petrol is that of Sulphur Free Petrol (SFP)
But where a fuel substitute is equally suitable for use with a number of different engines, the rate of excise duty is that of light oil (other than ULSP or SFP).
