Tax changes coming in on 1 April 2022 may affect businesses and individuals currently entitled to supply or use rebated gas oil (red diesel) and rebated biofuels.

The UK government is removing the entitlement to use red diesel for many sectors and affected businesses will have to use fuel that’s taxed at the standard rate for road diesel (DERV).

Red diesel and rebated fuel entitlement will be restricted to the following purposes:

• for vehicles and machinery used in agriculture, horticulture, fish farming and forestry. This includes allowing vehicles used for agriculture to be used for cutting verges and hedges, snow clearance and gritting roads
• for maintaining community amateur sports clubs and golf courses (including activities such as ground maintenance, and the heating and lighting of clubhouses, changing rooms etc.)
• for powering the machinery (including caravans) of travelling fairs and circuses.

The measure will also extend fuel duty to biodiesel, bioblends and fuel substitutes used in heating, applying the rebated duty rate to non-commercial heating and the full rate of duty to commercial heating. It therefore appears that parks that have golf courses/driving ranges will be entitled to continue to use red diesel for maintaining these areas, but not for general park use.  There are penalties for the misuse of red diesel and HMRC has powers to seize vehicles or other machinery in certain circumstances.

Contact your tax advisor and/or find out more on the .GOV website.