If you are a red diesel user, you should be well aware of the upcoming red diesel changes. The red diesel changes come into practice on the 1st of April, 2022. It focuses on reducing the number of industries allowed to use rebated fuel.
The line between doing the right and wrong thing with red diesel is blurry, to say the least. To help get to grips with the subject, our friends at Farmers Weekly asked their readers to post a series of questions to HMRC.
Red diesel rule-breakers generally fit into two camps – those that think nothing of topping up the pickup with red for personal reasons and those that don’t even realise they’re doing it.
For the former, the finer points of the red diesel rulebook probably aren’t worth worrying about. But for those who intend to play by the rules, plenty of grey areas can get you in a fix.
Legislation is rarely perfect when applied to real-world situations, so a degree of common sense is required when interpreting the answers on both sides.
Please be aware that this post looks at the Red Diesel changes from a farmer’s perspective only. The majority of the questions and answers will be to help the farmer’s weekly readers. For a more general view, visit our previous blog post here.
After reading this, another key point is that if you’re still in doubt, it’s probably worth checking with HMRC.
Questions on the Red Diesel Changes for HMRC
Q. What vehicles can I run on red diesel?
A. Red diesel should only be used on the road by ‘exempted’ vehicles. To qualify, these vehicles have to be engaged in an agricultural, horticultural or forestry-related activity.
These vehicles include:
- Tractors—In addition to agricultural, horticultural, or forestry purposes, tractors can be used to cut verges, hedges, or trees bordering public roads. Since November 2013, the gritting of roads, including travel to or from where gritting takes place, is permitted.
- Light agricultural vehicles – this refers to any single-seater machine that weighs no more than 1000kgs. An ATV is the most common example.
- Materials handlers such as telehandlers and loading shovels.
- Agricultural engines – this refers to any self-propelled agricultural machine. Combines, forage harvesters, pea viners and sprayers all come under this category.
- Snow clearing vehicles and gritters.
- Mobile cranes and diggers when in use or travelling to and from the place of use, providing they do not carry any unnecessary load.
Q. Is there a limit on how far I can drive with an agricultural vehicle?
A. As long you a performing an agricultural task, you can travel as far as you like on red diesel.
Q. I am an agricultural contractor. Are there any restrictions on when I can use red diesel?
A. To be able to use red diesel the nature of the work must be agricultural, horticultural or forestry-related and the contractor must be acting in the same capacity as the farmer would. The vehicle must be registered for agricultural use.
Q. What are the penalties for using the wrong diesel?
A. If detected HMRC will punish you. It starts by charging a restoration amount for removing all traces of red diesel.
This includes a fee for removing and storing the fuel. On top of this, there’s a fine to the value of lost tax revenue based on the size of the vehicle’s fuel tank.
The maximum fine for all of the above is capped at the vehicle’s value. In some cases, HMRC will go further and issue a fine for lost revenue (the difference between the red and white diesel duty rates) for the entire period of misuse, which could be the entire duration of ownership.
Q. What is the tax rate for red diesel compared with white diesel?
A. Red diesel is taxed at 11.14p/litre, white diesel at 57.95p/litre, and Ultra-Low-Sulphur diesel at 57.95p/litre (Correct at the time of print).
Q. Can I swap between red and white diesel by using two separate tanks?
A. No. Carrying two diesel tanks, which are both capable of connecting to the engine is illegal.
Q. What are the rules for storing red and white diesel on-farm?
A. Each product requires a separate storage tank and hose/gun outlet. Each tank should be marked, with the one containing red diesel showing a statement similar to “Not to be used as road fuel”.
Q. Can I use red diesel in my farm 4×4 if it is used only for agricultural purposes?
A. Yes, if it isn’t taxed and never goes on the road there is no problem fuelling a farm 4×4 with red diesel.
You can apply for a NIL licence from the DVLA if the vehicle is only going to travel short distances on the road between different blocks of farmland. This limits the vehicle to journeys of just 1.5km but it can be run on red diesel.
Q. I sometimes drive a vintage tractor out on a road run, about 10 miles or so, with a group of like-minded friends. Can we run on red diesel?
A. No. As this is not agricultural activity. White must be used.
Q. A contractor travels to a farm to make silage, which he then hauls to the owner’s yard. Is this agricultural, or is it classed as carrying goods for hire or reward?
A. If the contractor is cutting and collecting the silage as well as transporting it, it is an agricultural activity, which qualifies for red diesel use. Merely moving the silage after someone else has cut it constitutes haulage, white must be used.
Q. Is there a limit on how far I can travel as a non-agricultural contractor?
A. If you are registered and using white diesel there is no distance restriction.
Q. What are the requirements for vehicles registered as non-agricultural use?
A. Any vehicle carrying out non-agricultural operations must be taxed, run on white diesel, and will need to have a tachograph installed. The driver will require an HGV licence, trailers must be plated and tested by the DVSA, and the owner must hold an operator’s licence.
Q. When would I need an Operator’s Licence?
A. An Operator’s Licence is required for carrying goods in vehicles used for hire or reward.
Q. Can I tow a digger on a low-loader to use on another farm?
A. No – this is classified as haulage. If the tractor is to be used for agricultural work on the farm or is needed to tow another vehicle back from an agricultural activity it has been involved in, then its ok to be run on red diesel.
Q. Can I take scrap metal from my farm to the dump?
A. Scrap of an agricultural nature, for example, disposing of an old barn or milking parlour to clear the site for another agricultural purpose, then red diesel can be used.
Q. Can I use my low loader to transport farm machinery from one farm to another?
A. No. This is classified as non-agricultural haulage, and the vehicle must comply with non-agricultural regulations.
Q. Can I haul grain from my arable farm to my livestock enterprise; to the local mill; or my neighbour’s farm?
A. Yes, to the livestock enterprise and the mill. Haulage to your neighbour’s farm depends on the reason. If you have hired storage from your neighbour or are selling to them that is fine. But if you are moving in as a favour to your neighbour to who the crop belongs, you must not use red diesel.
Q. Can I supply red diesel to other farmers?
A. Anyone supplying or dealing in red diesel and paraffin must be approved by HM Revenue & Customs (formerly Customs & Excise).
However, this does not apply to those who obtain these oils for their use. For example, suppose a farmer buys red diesel or paraffin for his farming activities but occasionally hires or lends machinery to other farmers, with an operator. In that case, they will not need to be approved.
If a farmer frequently hires out machinery, consequently they must be approved under the Registered Dealers in Controlled Oils Scheme. Buying groups acting as agents don’t need to register, but those taking ownership of the oil for resale must be registered.
Q. If I have surplus soil or hardcore can I haul it to a neighbour for his use?
A. No. However, if you are moving the soil or hardcore from one part of your farm to another, this is an agricultural activity, and your neighbour can collect the soil or hardcore from you to transport back to his farm for agricultural purposes using red diesel.
Q. What are the rules for storing red and white diesel on a farm?
A. Each product requires a separate storage tank and hose/gun outlet. Each tank should be marked, with the one containing red diesel showing a statement to the effect: “Not to be used as road fuel”.
Q. What licensing requirements are there for carrying sewage sludge for the water board?
A. Because the carriage of human waste is not an agricultural activity, white diesel is required. An Operator’s Licence is also needed, the trailer should be tested and the vehicle excise licence will be at the haulage rate. The driver should also have the correct class of driver’s licence – normally C+E.
Q. What is the situation on hauling rubble with a tractor and trailer?
Collecting rubble for agricultural work is permitted if the person didn’t produce the waste. However, removing waste from a building site not linked to agriculture counts as waste disposal, requiring a white license.
Q. Can I collect feed and fertiliser from my local merchant using a tractor running on red?
A. Yes, if it is feed and fertiliser to be used as part of an agricultural operation on your farm moved by your tractor.
Q. Can I haul hay and straw to horse owners using red?
A. A farmer transporting his produce with his tractor may use red. A contractor who is employed to harvest and then moves produce can use red, but a contractor employed merely to move someone else’s produce must use white.
The end use of the hay and straw is irrelevant. An Operator’s Licence would be required when delivering produce more than 15 miles from the farm.
Q. Does hedge cutting for agricultural, equine, domestic and local authority customers qualify for red diesel use?
A. You can use red diesel for cutting hedges and verges those border public roads. To merely cart away the cuttings due to someone else doing the hedge trimming would be classed as haulage, therefore white diesel is required.
Hedge cutting is allowed with red diesel, but it can’t be used for maintaining recreational or sports facilities.
Q. Is there a limit on the distance I can travel with my grain to a mill? Does the same rule apply when delivering your straw to other farms or stables and your own-bagged potatoes to shops?
A. In terms of red diesel use there is no mileage limit for agricultural tractors if being used for bona fide agricultural, horticultural or forestry activity. An operator’s license will be required when delivering produce more than 15 miles from the farm.
The movement of produce to market or for processing using red diesel is allowed where the product is incidental to an agricultural, horticultural or forestry operation performed on the land.
Q. Can a contractor removing slurry/sludge from a cheese company take it to spread on nearby farms using red diesel?
A. No. This is classed as waste disposal/haulage since the cheese company is paying the contractor for the waste removal from its premises—either in cash or in kind.
If the sole purpose of the operation is to enrich the land rather than to dispose of the waste, it would be a permitted use. As a rule of thumb, a good guide is that fertiliser is an input paid for by the farmer to put on his land for agricultural benefit. Where the waste ends up is irrelevant.
Q. Can I deliver and collect livestock from the market using a tractor running on red?
A. If delivering ivestock then you can run on red, although an Operator’s Licence is required when delivering produce more than 15 miles from your farm. But, when collecting your livestock there is no mileage limit. If hauling for somebody else this would be classed as haulage therefore white should be used.
Q. Can I deliver farmyard manure to private houses and gardens with a tractor running on red?
A. No, this is not allowed. It is classed as haulage unless you are delivering the manure for processing, to market, a place of associated temporary storage, or a waste tip. The movement of the product must be incidental to the agricultural operation being performed on the land.
Q. I have arranged to go to the local quarry to pick up some stones to use on my farm. This will be for a building for which I have planning consent. The quarry is about 5 miles away.
Can this journey be made using a tractor and trailer running on red diesel? If I had to put in white diesel to make the journey, could I drain out the red that is already in the tractor?
A. If you are using the stone to repair a building used solely for agriculture or horticulture and will be carrying out the work yourself, this is permissible. Otherwise, no. If using white diesel, all the red must be drained off, the system flushed through with white diesel, and the filters replaced to remove all traces of red contamination.
Q. What are the rules for towing combine headers and other machinery around between a farm’s fields or other farmers’ fields?
A. A farmer or contractor can use his tractor to tow equipment used in agriculture, forestry, or horticulture, provided the tractor is used on the land as part of the work being done.
A tractor can also tow a combine between fields where the combine works, provided the tractor is used in the harvesting process at some point.
Q. Can I take an agricultural sprayer, which is primarily used on the farm, to spray a sports field 40 miles away from the farm, running on red diesel? Can a second tractor take a bowser to fill the sprayer also on red?
A. Maintenance and preparation of sporting and recreational facilities are not classed as horticulture for red diesel use; the sprayer will have to be towed or low-loaded to the field by a vehicle fuelled on white diesel. The bowser will need to be fuelled on white.
Q. How far could I travel with a digger or telehandler on the road using red diesel and what rules apply for construction use?
A. A telehandler is only permitted to use red if classified at the DVLA as a “works truck” and it meets the criteria of a ‘works truck’.
A digging machine has no mileage restrictions on it and qualifies for red diesel use in its own right, though there are restrictions on what it may carry. Where a digging machine is reliant on another vehicle to transport it to and from the place where it is to be used the digging equipment may use red but the carrier or towing vehicle must be fuelled on white diesel.
An agricultural tractor misused for construction or other non-qualifying work invalidates any entitlement to use red diesel.
Q. We are considering buying an HGV tractor unit and bulk trailer to haul grain from the combine to the dryer. It can also be used for another haulage, but only our goods and from land occupied by us.
Can this vehicle be taxed as a works truck or similar and can it burn red diesel?
A. No. The “works trucks” category refers to a specifically designed vehicle and is taxed accordingly. These vehicles are only permitted to travel on public roads for a distance of up to 1km from the premises where they are based.
A typical example would be a forklift truck or a dumper truck; an articulated heavy goods vehicle cannot be reclassified as a works truck.
Q: Can I run on red diesel when using a high-speed tractor (which is predominantly used as a conventional tractor) to haul my produce on a motorway?
A. To qualify for red diesel use, the tractor must be an agricultural tractor designed and constructed primarily for use off-road and used solely for agriculture, horticulture or forestry purposes.
Additionally, if this tractor fits this description and only uses the road in connection with an agricultural, horticultural or forestry operation, then red diesel is allowed as far as HMRC is concerned. There is no set distance limit on how far a tractor can travel so long as it fulfils the criteria above.
However, an agricultural tractor is defined as one which cannot exceed 25mph. As this high-speed tractor will travel at speeds greater than 25mph, besides it may not fit the classification of an agricultural tractor. Get in touch with DVLA to ensure the tractor is correctly registered.
Q. Can I use red diesel to grit public roads, and are the rules any different if I grit on private land?
A. Gritting work does not involve gritting roads at all, e.g. only private land, then use of the public road to and from is not permitted unless fuelled with duty-paid fuel, there is no qualifying activity.
Gritting private areas and the roads adjacent to them, red diesel is permitted, including the journey to and from.
Looking for more general info on the red diesel changes? Read our red diesel changes blog.
For more on the red diesel changes, see the HMRC website, or if you have any uncertainties or questions about this change, don’t hesitate to get in touch with the Red Diesel Entitlement Policy Team by email: reddieselentitlement@hmrc.gov.uk
Finally, are you ready to order Red Diesel before the law changes on the 1st of April?
Call your local depot today and our friendly sales team will answer any of your queries and find the best suitable delivery time for you.
