HM Revenue & Customs: Clarifies Rebated Fuel Use in Vehicles, Machines (Excise Notice 75)

We use some essential cookies to make this website work. We’d like to set additional cookies to understand how you use GOV.UK, remember your settings and improve government services. We also use cookies set by other sites to help us deliver content from their services. You have accepted additional cookies. You can change your cookie settings at any time. You have rejected additional cookies. You can change your cookie settings at any time. Find out when you can use rebated diesel, biodiesel or kerosene in vehicles and other machinery. Get emails about this page Print this page 1. Overview 1.1 What this notice is about It tells you when you can use rebated diesel, biodiesel or kerosene in vehicles and other machinery. Diesel (also known as gas oil or DERV ) is normally liable to the full rate of excise duty. There are circumstances where a particular vehicle or machine may be able to use fuel taxed at a reduced (rebated) rate of excise duty. This is because of the type of vehicle or machine, and the purpose it’s being used for. Rebated rate of excise duty is sometimes known as: The rebated rates of excise duty are shown in the rates and allowances list as ‘Marked gas oil’ . 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. They can also be supplied at a reduced duty rate for the same uses as diesel, if all the requirements that apply to diesel are applied. They must be marked and can only be supplied by a registered dealer in controlled oils (RDCO). HVO can be fully rebated for heating use only if it has been both: For this notice, references to using red diesel include using rebated: Kerosene is a heavy oil that may also benefit from a fully rebated rate. Rebated kerosene must also be marked and can be used only for generating heat for use in or on premises. Kerosene bioblend (produced by mixing kerosene and biodiesel) also benefits from a fully rebated rate if it is intended to be used for generating heat. Bioblend means a fuel produced by mixing biodiesel with heavy oil that has not yet been charged with fuel duty. Mixing biodiesel with heavy oil, such as diesel or kerosene, after the duty point does not produce bioblend. For example, rebated biodiesel cannot be mixed with rebated kerosene and used for commercial heating. Fuel oil is heavy oil containing asphaltene. It is typically used as marine diesel or in furnaces. Rebated fuel oil may be used for either: Certain types of vehicle and machinery, when being used for a particular purpose, can use rebated fuel. These are known as ‘excepted machines’. Any vehicle or machine that is not an excepted machine cannot use rebated fuel. The types of vehicles that can use red diesel are: But only when they’re being used for qualifying purposes, for example: Not all the qualifying purposes apply to all the vehicle types. You should check that your vehicle, when being used for a particular purpose, is entitled to use red diesel. Specific details on the acceptable uses of each type of vehicle are given in section 3. All types of boats and marine transport, except for private pleasure craft, are excepted machines and can use red diesel for any use. Private pleasure craft are not excepted machines. They can use red diesel in Great Britain (England, Scotland and Wales), only if the user makes a declaration of how much fuel they’ll use for propulsion, and pays full excise duty on that amount. Private pleasure craft in Northern Ireland cannot use red diesel for propulsion. Read about fuel used in private pleasure craft and for private pleasure flying (Excise Notice 554) . Machines and appliances being used primarily to generate heat and electricity for premises that are not used for commercial purposes can use red diesel. A kerosene heating system is an excepted machine when it is being used t