Guidance

Check when rebated fuel can be used

Updated 15 March 2022

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This publication is available at https://www.gov.uk/government/publications/changes-to-rebated-fuels-entitlement-from-1-april-2022/check-when-rebated-fuel-can-be-used

From 1 April 2022, rebated diesel (known as red diesel) and rebated biofuels will no longer be allowed to be used as they are currently.

You will only be able to use rebated fuel for specific purposes, when using certain allowed:

  • machines
  • vehicles
  • vessels
  • appliances

If you will no longer be able to use rebated fuel, and you cannot change to a cleaner alternative, you’ll need to use diesel or biofuel which the full rate of fuel duty has been paid for.

The rebated fuels affected by these changes are:

  • rebated diesel
  • rebated Hydrotreated Vegetable Oil (HVO)
  • rebated biodiesel and bioblend
  • kerosene taxed at the rebated diesel rate
  • fuel substitutes

HVO is a liquid hydrocarbon which is classified for excise purposes as heavy oil and treated the same as diesel.

Fully rebated kerosene is unaffected by these changes and can be used for all heating uses.

Biodiesel, bioblend and fuel substitutes are already subject to fuel duty when they’re set aside to be used in any of the following:

  • engines
  • motors
  • machines

They will also become liable for fuel duty if they’re used for heating purposes when used to heat premises used for:

  • non-commercial purposes — the rebated rate of fuel duty will apply
  • commercial purposes — the full rate of fuel duty will apply

When can rebated fuel be used from 1 April 2022

Agriculture, horticulture, fish farming and forestry sectors

You will be able to use rebated fuel in vehicles, machines and appliances for accepted uses if you’re in any of the following sectors:

  • agriculture
  • horticulture
  • fish farming
  • forestry

Accepted uses for agriculture, horticulture, forestry, fish farming and forestry are explained in the Memorandum of Agreement in Fuels for use in vehicles (Excise Notice 75).

The accepted uses in agriculture that rebated fuel may be used include, the running or participating in off-road outdoor events, which include agricultural events and ploughing matches. These events demonstrate the skills and exhibit the equipment and animals associated with agriculture and animal husbandry.

Within these sectors, rebated fuel is allowed for accepted uses only in:

  • agricultural vehicles
  • special vehicles
  • unlicensed vehicles
  • mowing machines
  • certain other machines and appliances

You can use rebated fuel to travel to and from the place where the vehicle has an accepted use, except on public roads in unlicensed vehicles.

You can also use rebated fuel in agricultural vehicles for:

  • accepted uses relating to agriculture, horticulture, fish farming and forestry
  • cutting trees, verges and hedges that border public roads
  • clearing or dealing with frost, ice and snow (including gritting), or flooding

You’ll also be able to use them for any other purpose on private land where they are ordinarily kept.

If you use rebated fuel in agricultural vehicles, machines and appliances for purposes relating to agriculture (including horticulture, fish farming and forestry), you will also be able to use them for any other purpose on private land where they are ordinarily kept.

If a vehicle allowed to use rebated fuel is transported by another vehicle, you can only use rebated fuel in the vehicle carrying or towing it if that vehicle also qualifies in its own right.

Vehicles used on railways

You can use rebated fuel to propel and stop a vehicle designed to run on a railway, but not on a tramway.

You cannot use rebated fuel to power other machines or equipment used on a railway, such as cooling or heating units in railway freight wagons, unless they are also powered by the engine that propels the vehicle.

Electricity generation and heating for non-commercial premises

You can use rebated fuel for electricity generation and heating for premises that are not used for commercial purposes.

‘Commercial purposes’ means trading in goods or services with the intention of making a profit. It does not include the delivery of a service, where it is intended that any profit made will be used to cover the costs of delivering that service.

Some examples of premises which will not be used for commercial purposes, and for which the use of rebated fuel in electricity generation and heating will be allowed, includes:

  • domestic homes
  • premises used to deliver central and local government functions or acts of public administration, for example, NHS hospitals, state schools, town halls, public libraries
  • places of worship
  • premises used by registered charities for their primary purpose trading, for example, educational charities delivering education or training, museums and independent schools

The type of activities that take place on these premises can include those relating to the services you provide, and activities that indirectly relate to the carrying out of your service. For example, a café selling food and drink in a library is not part of the library service but it enhances the overall experience for the public, and encourages them to make use of it, which also helps to contribute to its running costs.

You can use rebated fuel for electricity generation and to heat premises even if commercial contractors work there, provided they contribute to the running of your service. For example, the provision of services such as school catering and cleaning by commercial contractors does not mean that the premises are used for commercial purposes.

If your premises have different areas used for commercial and non-commercial purposes, you can use rebated fuel for heating and electricity generation for the area of the premises not used for commercial purposes, if a separate heating system or generator is used.

Rebated fuel can also be used for electricity generation and heating including:

  • accepted uses relating to agriculture, horticulture, fish farming and forestry
  • on land maintained by a community amateur sports club that is registered with HMRC and on golf courses and driving ranges
  • travelling fairs and circuses

Registered community amateur sports clubs (CASCs), golf courses and driving ranges

You can use rebated fuel in agricultural vehicles and unlicensed vehicles kept and used on:

A CASC does not include community clubs that are not registered with HMRC. Find out if you are eligible to register and how to register as a CASC.

You can also use rebated fuel in any machines or appliances (other than vehicles) being used in these venues. This includes heating and lighting buildings, such as clubhouses and changing rooms.

When you’re working on these venues, you can use rebated fuel in special vehicles, such as:

  • diggers
  • cranes

You can also use rebated fuel in special vehicles when the vehicle is going to or from a golf course or land maintained by a CASC that is registered with HMRC, where the vehicle is used.

You can only use rebated fuel in mowing machines used on a golf course or driving range, and on land maintained by a CASC. Mowing machines cannot be used on public roads but can be transported by another vehicle to be used at these places.

Where the land, golf course or driving rage is either side of a public road, you 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.

Sailing, boating and marine transport

You can use rebated fuel in all types of boat, except for private pleasure craft in Northern Ireland. This includes in their engines and in other machines and appliances permanently on the boat.

You cannot put rebated fuel into the fuel supply of the engine of a private pleasure craft in Northern Ireland.

If you buy rebated fuel for private pleasure craft in Great Britain, you will be required to pay the additional duty on the proportion of the fuel you will use to propel the craft.

Find more information about fuel used in private pleasure craft and the changes in Northern Ireland.

Travelling fairs and circuses

A travelling fair or travelling circus is one that can be dismantled at least once per year and can be transported from place to place.

You can use rebated fuel in machines and appliances to:

  • power rides
  • provide electricity and heating for caravan accommodation

You can use rebated fuel in a mowing machine or unlicensed vehicle used by a travelling fair or circus.

What vehicles, vessels, machines or appliances can use rebated fuel for accepted uses

You will only be able to use rebated fuel in certain vehicles or machines for specific accepted uses. Find more information about these accepted uses in ‘when can rebated fuel be used from 1 April 2022’.

Agricultural vehicles

Agricultural vehicles can use rebated fuel for the following accepted uses:

  • agriculture, horticulture, fish farming and forestry
  • cutting trees, verges and hedges that border public roads
  • clearing or otherwise dealing with frost, ice, snow (this includes gritting), or flooding
  • by a club registered as a community amateur sports club
  • on golf courses and driving ranges

An agricultural vehicle is 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

Special vehicles

Special vehicles can use rebated fuel for the following accepted uses:

  • agriculture, horticulture, fish farming and forestry
  • by community amateur sports clubs that are registered with HMRC and on golf courses and driving ranges

A special vehicle is a vehicle designed, constructed and used as set out in Part 4 of Schedule 1 to the Vehicle Excise and Registration Act 1994, but without any weight restriction.

Special vehicles include:

  • digging machines
  • mobile cranes
  • mobile pumping vehicles
  • work trucks
  • road rollers

Unlicensed vehicles

Unlicensed vehicles can use rebated fuel for the following accepted uses:

  • agriculture, horticulture, fish farming and forestry
  • by community amateur sports clubs that are registered with HMRC and on golf courses and driving ranges
  • by travelling fairs and circuses
  • any other circumstances providing the vehicle is using fuel gas for fuel

Unlicensed vehicles include those that are not kept or used on public roads and where you have made a Statutory Off Road Notification (SORN), if required, to the Driver and Vehicle Licensing Agency.

Mowing machines

Mowing machines can use rebated fuel for the following accepted uses:

  • land maintained for purposes related to agriculture, horticulture, fish farming and forestry
  • by community amateur sports clubs that are registered with HMRC and on golf courses and driving ranges
  • travelling fairs and circuses

Mowing machines include vehicles or machines designed only for mowing grass.

Other machines, appliances and unlicensed vehicles

Other machines and appliances can use rebated fuel for the following accepted uses:

  • agriculture, horticulture, fish farming and forestry
  • by community amateur sports clubs that are registered with HMRC and on golf courses and driving ranges
  • by travelling fairs and circuses

Other machines and appliances can use rebated fuel for electricity generation and heating for premises that are not used for commercial purposes.

Other machines and appliances include:

  • machines or appliances that are not a vehicle, vessel or mowing grass machine
  • non-road mobile machinery

Vessels

Rebated fuel can be put into any vessel apart from the fuel supply of the engine of a private pleasure craft in Northern Ireland.

If you buy rebated fuel for private pleasure craft in Great Britain, you’ll need to pay the additional duty on the proportion of the fuel you’ll use to propel the craft.

Vessels include all types of boat.

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