Reminder of rebated fuel (red diesel) rules

The rules concerning use of rebated fuel (red diesel) changed during 2022, which resulted in it being prohibited from use for most landscaping activities. HM Revenue and Customs (HMRC) released an updated version of their 'Excise Notice 75' document, which the Association has used to write this definitive guide for the landscape industry.  

What is rebated fuel?

Fuel which is subject to a lower rate of excise duty must be marked to show that the reduced (rebated) rate of duty has been charged and paid. 

Diesel taxed at the rebated rate of excise duty is sometimes known as red diesel, marked diesel and marked gas oil. However, biodiesel and hydrotreated vegetable oil (HVO) may also be supplied at a reduced duty rate for the same uses as diesel. 

Biodiesel and hydrotreated vegetable oil (HVO) are diesel quality fuels derived from biomass. HVO is treated the same as heavy oil under the Hydrocarbon Oil Duties Act 1979, and both of these fuels are liable to the same excise duty rates as diesel.

Therefore, references to using red diesel include:

rebated diesel
rebated biodiesel
rebated diesel bioblend (produced by mixing diesel and biodiesel)
rebated hydrotreated vegetable oil

Explanation of rules for users of red diesel in the landscape industry

Whilst agriculture, horticulture, fish farming and forestry sectors retained the entitlement to use red diesel from 1 April 2022, HMRC explicitly excluded most landscaping activities. A small number of landscape operations retain the right to use red diesel.  The table below summarises the rules effective from 1 April 2022:

* Community amateur sports club (CASC) 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

** Cutting verges, hedges or trees that border public roads

Only an ‘agricultural vehicle’ which meets one of the following four definitions below can use red diesel to cut verges, hedges or trees that border public roads. 

The agricultural vehicle must fit into ONE of the following categories:

1. A tractor.
2. A single-seat vehicle of less than 1,000kg that is designed and constructed primarily for use off-road.
3. A vehicle only used for agricultural, horticultural or forestry purposes, that is licensed by the DVLA to use public roads only when passing between 2 areas of land occupied by the same person, and that distance is less than 1.5 kilometres by road.
4. A vehicle with permanently attached or built-in machinery used for handling or processing agricultural, horticultural, aquatic farming, forestry produce or materials — this category includes vehicles such as combined harvesters, crop sprayers, forage harvesters, pea viners, mobile seed cleaning machines and feed milling machines.

NOTE: the use of ‘road’ in the HMRC guidance includes:

• Footpaths
• Bridleways
• Carriageway

Further reading:

Using rebated fuels in vehicles and machines (Excise Notice 75)