Veggie Oil & Biodiesel Duty

Despite verbal assurances by HMRC employee re non payment of duty on purchase of sub 2500 litre quantities

see below,
I have queried the use of the word "may"
what only if the supplier feels like it?,
I would have thought that "shall" was more appropriate

Date: 13 September 2007
Reference: C11851

Dear Mr Marcus

Biofuels Simplification

Thank you for your e-mail dated 10 September 2007 regarding the purchase of 1000 litres of biodiesel to use in your car and whether you have to register with or pay excise duty to H M Revenue and Customs [HMRC].

I can confirm that if you use less than 2,500 litres biodiesel as road fuel in your diesel car, you will not have to pay any excise duty to HM Revenue & Customs. However, as you intend to purchase the fuel from a producer he may pass the duty on to the customer which will be reflected in the amount charged per litre. If the producer of the biodiesel is VAT registered then VAT will be charged at 17.5% which will be included in the cost of the fuel.

Please find below further details regarding the changes to the bio
diesel regulations for your information.

The changes brought in under the 'Biofuels Simplification' [Revenue and Customs Brief 43/07] whereby producers of biofuels (or other fuel
substitutes) who produce (or use) less than 2,500 litres per annum, will no longer be required to make entry, render returns or pay duty, are intended to cover both those who produce or use biofuels (such as biodiesel, or bioethanol), and those who produce or use other 'fuel substitutes' (such as vegetable oil).

Anyone producing (or using) more than 2,500 litres per annum will have to make entry of their premises (register), render returns and pay duty.

The Simplification is intended to include in the relaxation all those who use 'vegetable oil' in their vehicles (as a fuel substitute). They will not have to make entry of their premises, render returns or pay duty, and will become 'exempt' producers. They will however remain liable to register, render returns and pay duty, when they know that their production (or use) of biofuels or other fuel substitutes (such as vegetable oil) will exceed 2,500 litres per annum.

In short for the purpose of the 'Biofuels Simplification' we do not differentiate between those who produce 'Biodiesel' meeting the fiscal definition in HODA, and those who produce a Fuel Substitute (Biofuel) which does not. Both are covered by the relaxation. Thus the relaxation covers those 'producers' who 'use' or who put vegetable oil into their fuel tank (as a fuel substitute).

Where producers or users will exceed 2,500 litres per annum, then they need to make entry of their premises, render returns and pay duty in accordance with Public Notice 179e (which is currently being amended to reflect the recent changes).

For those producers who are 'registered' there will remain a continuing requirement for them to show that the fuel that they produce (or use) is Biodiesel (and meets the fiscal definition in HODA) and where this is not the case, they will continue to be liable to the higher rate of duty on the biofuel they produce (or use) at the higher Fuel Substitute rate.

Revenue and Customs Brief 43/07
http://www.hmrc.gov.uk/briefs/excise-duty/brief4307.htm

Public Notice 179E
http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.por
tal?_nfpb=true&_pageLabel=pageLibrary_PublicNoticesAndInfoSheets&propert
yType=document&columns=1&id=HMCE_CL_000205

In regard to record keeping I would suggest that as well as those mentioned in your e-mail that you also keep the receipts for the purchase of the vegetable oil.

Max you commented that vegatable oil was a grey area,
it however appears to be completely kosher

I have queried by return,
Cheers
Marcus