…Unless you have stocks of red diesel. Whether the problems around fuel shortages at the pumps will continue or are over seems to depend on who you listen to. It may be the case that some parts of the country have fewer issues than others but whenever the crisis ends, it is likely to leave a bitter taste for those sectors which rely on being able to fuel their transport fleet in order to maintain competitive.

Red diesel versus white diesel

Another headache for some is that the use of rebated fuel (red diesel) is being severely curtailed with effect from 1 April 2022, and from that date, the more expensive white diesel (fully taxed fuel) will have to be used by many instead. Businesses that retain stocks of red diesel are being advised by HMRC to reduce their stocks of red diesel before the change comes into force and anyone found using red diesel for an unapproved purpose after April next year will need to justify that use or else face the risk of HMRC seizing the relevant machine or vehicle. 

But the coinciding of the crisis and the changes to red diesel use may provide a solution for some. HMRC has the power to approve the use of red diesel in vehicles used on public roads where there are ‘exceptional circumstances’. What constitutes ‘exceptional circumstances’ is determined by HMRC in the first instance and it seems they are setting quite a high bar for those businesses which have approached them so far. But some applications to make use of this relaxation are getting through and if a business has accessible stocks of red diesel, and if their use of that fuel is for an essential and critical activity (think ‘health’, ‘security’, ‘utilities’, and other essential goods and services) accessing this relaxation could resolve several issues at once.

Get in touch with an expert

In 2020 we have added further Indirect Tax specialisms into our team with expertise now available across all environmental taxes such as Climate Change Levy, Landfill Tax, and Air Passenger Duty. Should you have any questions on this article or require more information on these specialisms, get in touch with Xeinadin Group.

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