HMRC: Excise Notice 184B Furnace Fuel Rebate Approval Clarified

• Excise Notice 184B details how businesses can obtain a rebate on duty for light oil used as furnace fuel.
• Businesses must apply for and receive approval from HMRC, typically requiring significant annual quantities, though pilot schemes are considered.
• Approved businesses are required to provide suppliers with a certificate of entitlement for rebated light oil.
• HMRC officers possess legal authority to conduct audits, necessitating full cooperation and access from businesses for inspections.
• The rebate's legal foundation is primarily established by section 14 of the Hydrocarbon Oil Duties Act 1979, as amended.

Businesses seeking to benefit from the Excise Notice 184B furnace fuel rebate must secure official approval from HM Revenue and Customs to receive light oil at a reduced duty rate.

Businesses utilizing light oil as furnace fuel may be eligible for a rebate on associated duties, as detailed in Excise Notice 184B. This guidance specifically addresses how companies can obtain this duty reduction, serving as an updated directive that supersedes the previous Notice 184B issued in March 2002. The provisions are tailored for entities that procure light oil for the express purpose of furnace fuel consumption.

It is important to note that this particular notice does not extend to traders involved in the acquisition of recovered light oil under the tied oils scheme. For those dealing with the recovery of waste oil, separate guidance is available through Excise Notice 184A, which outlines relief for mineral oil applied to certain uses. The primary objective of Excise Notice 184B is to clarify the process for eligible businesses to secure light oil at a reduced, rebated duty rate.

To qualify for the rebate, businesses must apply for and receive official approval from HM Revenue and Customs (HMRC). This approval process is outlined in section 2 of the notice. While the specific information required for an application is not exhaustively listed, applicants are expected to provide comprehensive details. The oil itself can be prepared for burning through various methods, including vaporization or atomization immediately before combustion, or by injection or spraying into a gas stream for burning at a later point or after storage.

Businesses seeking to benefit from the Excise Notice 184B furnace fuel rebate must secure official approval from HM Revenue and Customs to receive light oil at a reduced duty rate. Applications for this approval should be submitted via email to the Mineral Oil Reliefs Centre at morcapprovalsteam@hmrc.gov.uk. While the notice indicates that applications should include specific information, the precise details are not enumerated.

Approval is generally granted to businesses that handle significant annual quantities of light oil. The term 'significant' is not rigidly defined, as each application is assessed on its individual merits. However, HMRC may consider approving pilot schemes, particularly when applicants can demonstrate a serious intention to develop or evaluate the use of light oil as furnace fuel. In scenarios where one trader receives and then vaporizes or atomizes rebated light oil for another trader's burning, both parties are required to apply for and obtain approval.

Once approved, businesses are obligated to provide their suppliers with a certificate confirming their entitlement to receive rebated light oil. For individual deliveries, this certification must be included on the written order, specifying the quantity and description of the oil, along with the purchaser's name, approval number, and a declaration of intended use as furnace fuel. For businesses with regular suppliers, a general certificate on company letterhead, stating the approval number granted by HMRC, is acceptable.

The framework for the Excise Notice 184B furnace fuel rebate is primarily rooted in section 14 of the Hydrocarbon Oil Duties Act 1979, as amended. It is crucial for businesses to understand that while this notice provides HMRC's interpretation of the law, it does not serve as a substitute for the statutory provisions themselves. Further comprehensive details regarding mineral oil statutory provisions can be found in section 1.3 of Excise Notice 179, which covers general information on motor and heating fuels, and the accounting for Excise Duty and VAT.

HMRC officers are vested with legal powers to ensure compliance with these regulations. Audit visits are typically arranged by prior appointment, during which the auditing officer will communicate the expected procedure, the documents required for inspection, and the anticipated duration of the audit. Businesses are legally required to provide all necessary facilities and assistance to officers during these visits, enabling them to verify oil quantities and examine premises, records, and documents.

The scope of these checks and inquiries may extend to any oil and goods on the premises directly related to the rebate allowed under the terms of the notice. Upon the conclusion of an audit, the officer is expected to provide comments on their findings, and a formal letter may subsequently be issued to the business. Other relevant notices include Excise Notice 206, pertaining to revenue traders’ records, and Excise Notice 184A, which addresses relief for mineral oil put to certain uses.

Source: Original reporting via GOV.UK guidance