Unmarked Heavy oil, including DERV and road fuel
extenders, unmarked kerosene or unmarked gas oil attracts the full
(un-rebated) rate of excise duty, at the time of writing **
£0.5694p per litre.
Ultra Low Sulphur Diesel (ULSD) and
Sulphur Free Diesel (SFD) are charged at a lower
rate
£0.5035p per litre.
Oil not to be used as a road fuel, which is put to off-road
use or to other qualifying uses, attracts a rebate of duty, which
when applied to the full rate for the oil creates effectively a new
lower rate of excise duty.
The Hydrocarbon Oil Duties Act 1979 – Schedule 1 as
amended, gives details of those vehicles which are accepted as
being ‘
Excepted Vehicles’ and which are entitled to
use marked rebated oils for off-road use, provided that these are
put to eligible use.
The Finance Act 2006 introduced legislation amending section
27 of the Hydrocarbon Oil Duties Act, 1979 (HODA) to enable
Schedule 1 of HODA to be amended by Treasury Order. N.B. Changes
were made to the Schedule with effect from 1 April 2007.
(For further information on ‘Excepted Vehicles’
please see the HMRCs Internet site).
A new concession for vintage tractor owners who purchase
kerosene for the production of
Tractor Vaporising Oil has also been granted,
which allows them to mix rebated kerosene (MKO) with other road
fuels for use in vintage tractors constructed before 1960.
(For further information on this concession, please see the
department’s internet site).
Light Oil Furnace Fuel (LOFF) which would attract
a full (un-rebated) excise duty rate of
£0.6007p per litre if used as a road fuel,
attracts a rebate of
£0.5078p per litre, reducing the duty to
£0.0929p per litre when it is used in boilers
and furnaces as a heating fuel.
Because many of the oils which are supplied
‘rebated’ can be used either as a road fuel or as an
road fuel extender, most types of rebated fuel is marked and/or
dyed as evidence that this has been supplied at a reduced rate of
duty, either for off-road or for other eligible use.
Rebated oils include
Marked Kerosene (MKO) that is normally used as
domestic heating oil but may be used as a motor fuel ‘off
road’ or in an excepted vehicle,
Marked Gas Oil (MGO) also known as ‘Red
Diesel’ and Marked Ultra Low Sulphur Diesel. The full duty
rate for Heavy Oils is
£0.5694p per litre and the duty rate for ULSD
is
£0.5035p per litre.
Marked Gas Oil attracts a rebate, which reduces
its effective excise duty to
£0.0969p per litre, when the oil is put to a
qualifying use.
Marked Kerosene attracts a full rebate of
£0.5649p per litres, making the effective duty rate –
Nil.
Aviation Turbine Fuel (AVTUR) is a high
specification kerosene, which is also supplied rebated but unmarked
for aircraft use, it attracts a rebate of
£0.5694p per litre, making the effective duty
rate – Nil.
Heavy Fuel Oil which would attract the full
(un-rebated) heavy oil duty rate of
£0.5694p per litre if used as a road fuel,
attracts a rebate of £0.4765p per litre, giving it an
effective excise duty rate of
£0.0929p per litre when it is used as a
heating fuel.
Marked rebated mineral oils remain controlled beyond the duty
point until they have been supplied and put to eligible use, under
the
Registered Dealer in Controlled Oil* (RDCO)
scheme, this is because there is an incentive to
misuse them as a road fuel (MGO or ‘Red’ Diesel) or as
a road fuel additive or extender (kerosene) due to the difference
between the un- rebated and rebated duty rates involved. To counter
this risk the department implemented the
Oils Strategy, which is aimed at reducing and
controlling the volumes of marked rebated mineral oils diverted to
illegal road fuel use.
* A Guided Learning Unit on the ‘RDCO Scheme’
Reference 003202 is now available in Online Learning).
** Details of the current rates of excise duty can be found
on HMRC’s Internet site at www.hmrc.gov.uk
