Changes to red diesel rules from April 2022

During the 2020 Budget, the Government announced it was considering removing the entitlement to use rebated fuel (red diesel) from most sectors - including landscape maintenance and mowing machines - from April 2022 onwards, in an attempt to incentivise the development and adoption of greener alternatives.  A consultation ran from July 2020 to October 2020.

The British Association of Landscape Industries responded to this consultation on behalf of the landscape industry, highlighting the severe financial impact this decision would have on the industry whilst offering little benefit to the environment in the short or medium-term. 

We urged the Government to reconsider their proposal and retain the current rules until greener alternatives are released by equipment manufacturers. 

Regrettably, in March 2021 HM Revenue and Customs announced the entitlement to use red diesel will be removed from most sectors from 1st April 2022, including nearly all commercial landscape activities.   

Explanation of rules from April 2022

Whilst agriculture, horticulture, fish farming and forestry sectors retain the entitlement to use red diesel from April 2022, HM Revenue and Customs have explicitly excluded landscaping and activities associated with landscaping from these sectors.

The table below summarises the rules effective from April 2022.

* Community amateur sports clubs (CASCs) and golf courses

Red diesel may be used in agricultural vehicles and unlicensed vehicles to maintain:

• land maintained by a Community Amateur Sports Club
• a golf course
• a golf driving range
• Any machines or appliances (other than vehicles) being used in the venues above. This includes heating and lighting buildings, such as clubhouses and changing rooms.

When working on these grounds, business owners can use rebated fuel in vehicles including:

• diggers
• cranes
• mowing machines
• In special vehicles when the vehicle is going to or from a golf course or land maintained by a CASC, where the vehicle is used.

Where the land or golf course is either side of a public road, business owners can use rebated fuel in an agricultural or special vehicle while travelling between the 2 parts by the shortest possible route, providing the vehicle is licensed to use the road.

** Commercial landscape maintenance

Only agricultural vehicles may be used to cut verges and hedges that border a road. HM Revenue and Customs define an agricultural vehicle as a:

• tractor
• single seat, light vehicle (less than 1,000 kilograms), designed and constructed mainly for off-road use
• vehicle licensed only for use between different parts of land for purposes relating to:
  - agriculture
  - horticulture
  - forestry
• vehicle constructed and adapted, with built-in or permanently attached handling and processing equipment, to be used for purposes relating to agriculture, horticulture, fish farming or forestry

How to prepare for the changes

In advance of 1st April 2022 members are encouraged to run down the fuel they have to as close to nil as reasonably practicable. You are permitted to use up rebated fuel in a vehicle or machine after 1st April 2022, if the fuel was legally put into the vehicle or machine before 1st April 2022.

Members who cannot use red diesel from 1st April 2022 should plan to use up stocks of fuel held in storage tanks by this date. If you order supplies of red diesel between now and April 2022, try to order the amount you expect to use by April 2022.

Further reading:

Association website: Full explanation of changes
HMRC webpage: How to prepare for the changes to rebated fuel if you’re a fuel user
HMRC webpage: Check when rebated fuel can be used