Guidance

Aviation turbine fuel (Excise Notice 179a)

Find out about the rules for the production, supply and use of aviation turbine fuels (avtur).

From:
HM Revenue & Customs
Published
1 May 2014
Last updated
7 February 2024 — See all updates

Parts of this notice may have force of law. These are identified at the relevant places in the notice.

1. Overview

1.1 Information in this notice

This notice explains the rules governing the supply and use of aviation turbine fuels (avtur). Other aircraft fuels such as aviation gasoline (avgas) are light hydrocarbon oils, which are not covered by this notice. This notice has been updated as a result of the UK leaving the EU.

1.2 Who should read this notice

This notice is for anyone involved in the import, production, sale, storage and movement of avtur including end users.

1.3 The law covering this notice

Primary legislation

This includes:

  • the Hydrocarbon Oil Duties Act 1979 (HODA)
  • the Finance Act 2002
  • the Customs and Excise Management Act 1979 (CEMA)

Secondary legislation

This includes:

  • the Hydrocarbon Oil (Registered Dealers in Controlled Oil) Regulations 2002 (SI 2002/3057)
  • the Hydrocarbon Oil (Marking) Regulations 2002 (SI 2002/1773)
  • the Hydrocarbon Oil (Registered Remote Markers) Regulations 2005 (SI 2005/3472)

1.4 Definition of aviation turbine fuels (commonly known as avtur, aviation kerosene, jet fuel, Jet A1, ATK, SAF)

Aviation turbine fuels are heavy hydrocarbon oils defined for excise purposes as ‘kerosene’ — read Motor and heating fuels: general information and accounting for Excise Duty and VAT (Excise Notice 179) for definitions.

They are controlled oils as defined in Section 27 (1) of HODA which are intended for use as fuel for aircraft engines and are delivered for that purpose. This means they are included within the Registered Dealers in Controlled Oils (RDCO) scheme.

For the purposes of this notice, aviation turbine fuel also includes sustainable aviation fuel (SAF), such as synthetic kerosene, whether or not blended with aviation turbine kerosene, intended and certified for use only in aircraft engines.

Aviation turbine fuel is referred to as ‘avtur’ in this notice.

1.5 Duty rate for avtur

Avtur benefits from a full rebate of fuel duty. The tax code is 601. This applies whether the fuel is heavy oil (kerosene or hydrotreated vegetable oil (HVO) refined to kerosene specification), or a fuel substitute for aviation kerosene. 

Fully rebated avtur can only be used as fuel for an aircraft engine, other than for private pleasure flying.

Fully rebated kerosene must normally be marked to identify it, but for quality and safety reasons, avtur is allowed a general marking waiver.

Avtur is only fully rebated if all suppliers and final users comply with the requirements set out in this notice.

1.6 Blending aviation kerosene and sustainable aviation fuel after the duty point

As all types of avtur have the same tax code (601) and are fully rebated and unmarked, they can be mixed after the duty point without specific HMRC approval.

1.7 Avtur and the RDCO scheme

We do not currently require returns to be submitted by RDCO dealers only supplying avtur.

However, you must still fulfil your legal requirements under the scheme, such as customer checks and record keeping requirements, which are designed to minimise the potential for misuse of avtur. See section 4 for more on RDCO obligations.

1.8 VAT liability for avtur used on flights within the UK

Supplies of avtur for commercial flights within the UK and all private flights are normally liable to VAT at the standard rate. See section 6 of Fuel and power (VAT Notice 701/19) for further details.

For further information regarding VAT liability, see the section dealing with aircraft stores in VAT on goods exported from the UK (VAT Notice 703).

Find rates of duty and VAT.

2. Storage and delivery of avtur

2.1 Storing avtur in an excise or tax warehouse

Avtur can be stored in an excise or tax warehouse. It’s subject to the same rules and regulations as other oils put into warehouse. Read Motor and heating fuels: General information and accounting for excise duty and VAT (Excise Notice 179) for more information.

2.2 Rules regarding the supply of avtur

Avtur must be used as aircraft fuel, and not as any other kind of fuel, to qualify for the marking waiver and full rebate. Avtur should not be used for purposes which do not involve combustion of the oil (for example, calibration of fuel systems).

If avtur is used for meter calibration it should be returned to avtur stock for ultimate delivery, for aircraft use.

Whenever you make a supply of avtur, you must state on your commercial delivery note:

‘Delivered fully rebated as fuel for aircraft engines only. HMRC permission must be obtained before diversion to alternative use’.

If you make or sign, or cause to be made or signed, a declaration that is untrue in any way then you could be liable to the following:

  • financial penalties
  • imprisonment
  • loss of the rebate of excise duty, or an amount equivalent to the rebate of excise duty involved

2.3 Where avtur can be delivered

Avtur may be delivered:

  • to a duty-suspended installation or to a Registered Consignee at import (Northern Ireland only)
  • to an export warehouse
  • to dedicated avtur storage tanks (usually at airfields) — read paragraph 2.6
  • for use in the design, testing, repair or maintenance of aircraft engines
  • to armed forces for use in military aircraft
  • direct to aircraft
  • to an end user — if you have evidence it will be used in an aircraft

UK-produced avtur can be delivered:

  • to an export warehouse
  • to dedicated avtur storage tanks (usually at airfields) — read paragraph 2.6
  • for use in the design, testing, repair or maintenance of aircraft engines
  • to armed forces for use in military aircraft
  • direct to aircraft
  • to another RDCO approved to deal in avtur, or an end user if you have evidence of use in an aircraft

Avtur is a finished product which has a nil rate of duty on delivery to home use. Like other finished products, it does not usually travel under duty suspension between UK warehouses. Movements of avtur do not require an accompanying W8 form. However, where avtur has been warehoused for excise duty purposes it may be delivered to an export warehouse under duty suspension. In these circumstances the W8 duty suspension movement procedures will apply.

2.4 Redesignation of avtur as marked kerosene

In exceptional circumstances we may allow kerosene delivered as avtur (that is, unmarked and fully rebated) by cross-country pipeline to be marked and redesignated as marked kerosene. See Motor and heating fuels: General information and accounting for Excise Duty and VAT (Excise Notice 179), paragraphs 7.12 and 8.13.4. This is intended to be a temporary measure solely to overcome significant and unforeseen operational problems. Normally, such product should instead be delivered as unmarked kerosene, duty should be paid at the unrebated rate, and the rebate should be claimed when the product has been marked at a Registered Remote Marker’s premises at its destination.

You must obtain HMRC authority before using this exceptional concession. If a large business you should contact your Customer Compliance Manager (CCM) or telephone our imports and exports helpline. You will need to satisfy us there’s a temporary operational need for this facility, and must make sure that the limits of the concession are not breached.

2.5 Physical security at avtur distribution and remote marking premises

Avtur storage and distribution sites, and Registered Remote Markers’ premises, are controlled by the occupiers without our continuous supervision. The level of physical security at such installations should be sufficient to guard against illicit removal of goods. Appropriate control must be exercised over goods, persons and vehicles, entering and leaving such premises.

Dealers in avtur, anyone handling product on their behalf and any other third parties must be able to demonstrate to us that they have procedures in place, which ensure:

  • the safe custody of avtur — a controlled oil — in their charge
  • that all persons employed at, or using, the premises are aware that the installation may contain controlled oil
  • that all persons understand that any unauthorised removal of controlled oil, or action which avoids the proper charge of duty, is a revenue offence

Details of appropriate warning notices are shown in Appendix C of Motor and heating fuels general information and accounting for Excise Duty and VAT (Excise Notice 179).

2.6 Avtur storage tanks

These must be:

  • fixed at a distribution site approved by us
  • at an airfield, for delivery to an aircraft
  • for transport to an aircraft at an airfield or directly to aircraft, to be approved by us, and with conditions set by us
  • for transport to a distribution site, to be approved by us, and with conditions set by us
  • clearly labelled for use as avtur

3. Parts of the RDCO scheme that apply when trading in avtur

3.1 Applying for approval as an RDCO

You must be approved by us as an RDCO before you deal in any type of avtur. You must also make sure that avtur is supplied only to other dealers who are approved as RDCOs or to legitimate end users.

If you’re an avtur dealer only, you do not need to submit RDCO returns.

See paragraph 3.4 below for avtur dealers who do not need to apply for approval.

3.2 If you’re already an RDCO

If you’re already approved as an RDCO and you also deal in avtur, you will be required to submit an additional HO4 application form stating that you’re an avtur dealer. You can get this form by contacting the Mineral oils reliefs centre.

You will also have to provide details of the trading names and premises that you use for your avtur business. You will retain the same RDCO approval number and will not be required to include avtur transactions on your monthly RDCO return form HO5 — submitting your return as a registered dealer in controlled oil.

See registered dealers in controlled oil (Excise Notice 192) for more information about the RDCO scheme.

3.3 How to apply for approval

If you deal in avtur and you’re not currently registered under the RDCO scheme, you will need to apply for approval. You should complete form HO4 — applying to submit annual returns as a registered dealer in controlled oil.

See Registered dealers in controlled oil (Excise Notice 192) for more information about the RDCO scheme.

3.4 Who does not need to apply

Sales at the wing tip

All businesses involved in the supply of avtur from importation or refining through to delivery to the aircraft are included within the RDCO scheme. However, occasionally ownership of the avtur changes at the point of delivery or loading onto the aircraft — often referred to as ‘at the wing tip’ or as ‘flash sales’. An example would be where a UK supplier of avtur delivers fuel to an aircraft, but at the wing tip — point of delivery — sells the fuel to an agent acting on behalf of the airline. The agent then makes the final supply to the airline.

As this type of transaction takes place on or after delivery to the aircraft, currently we’ll not seek to include you within the RDCO scheme if you’re one of these agents.

End users

The RDCO scheme does not include end users of avtur, although end users have an obligation to make sure the correct treatment of any avtur not used as aircraft fuel. Section 7 of this notice has more information.

4. Supplying or selling avtur

The RDCO scheme was introduced with the aim of identifying and tackling commercial oils fraud. Our aim under the scheme is to work in partnership with honest distributors to improve our control of the supply chain for avtur and other controlled oils, and to protect the legitimate trade.

We require distributors to take sensible and reasonable steps to minimise the chance of avtur and other controlled oils being obtained by those intent on commercial scale laundering or misuse. The key to success of the scheme is good communication and co-operation between HMRC and business.

4.1 The RDCO obligations when supplying avtur

This section has force of law under under the Hydrocarbon Oil (Registered Dealers in Controlled Oil) Regulations 2002 and The Revenue Traders (Accounts and Records) Regulations 1992.

As an RDCO, you must take every reasonable precaution to make sure that your supplies of controlled oil are only to persons who will use that oil as permitted by the law. This is a legal obligation imposed under Regulations 5(3) and 8(2) of the Hydrocarbon Oil (Registered Dealers in Controlled Oil) Regulations.

If HMRC considers that you have failed in that obligation, they can take enforcement action against you, ranging from a variation of the conditions of your approval, to a warning letter, to (in more serious cases) withdrawal of your approval, civil penalties and even prosecution.

What HMRC regards as reasonable precautions: Your processes and systems

Your management, marketing, business processes and systems (for example, ISO 9000), operating and training procedures and practices must be robust.

You must make clear to your customers what restrictions apply to use of avtur. Your labelling and marketing of products must be perfectly clear on these points — see the delivery note requirement further down this section.

Checks on your customers

You must carry out appropriate checks on all of your customers and be accountable for all of your supplies to them. Your checks must be sufficient to satisfy you of a customer’s integrity and that they intend to use the avtur supplied to them as fuel for an aircraft engine.

In addition to the standard checks described in paragraph 4.6 you must consider the following particulars and assess whether they are lawful and consistent with each other, the:

  • nature of the customer’s business
  • nature of the controlled oil being supplied, aviation kerosene, may be delivered only for use as fuel in aircraft engines
  • volumes and frequency of your supply to them
  • details of the movement, including the means of transport or collection, the route and the place of delivery
  • payment arrangements and conditions

When supplying to another RDCO, you must confirm that they are approved by us to deal in avtur. If the RDCO is not able to provide evidence of this, you should contact the Mineral Oil Reliefs Centre (MORC) by email to morcapprovalsteam@hmrc.gov.uk.

You must make sure your staff are sufficiently trained to recognise and report suspicious matters to us.

If you suspect fraud, you must report tax fraud or avoidance to HMRC.

Delivery note statement

Your delivery notes must bear the following statement:

For all supplies of avtur: “Delivered duty-free as fuel for aircraft engines only. Permission must be obtained from HMRC before diversion to alternative use”.

There are additional obligations on those who supply avtur that will be used for private flying. More details on these obligations can be found in paragraph 4.16.

4.2 Recording and keeping information about supplies of avtur

In addition to the usual accounting records covered in section 9 of this notice, you must also record additional information about avtur supplies.

The next paragraph has force of law under Regulation 6 of the Revenue Traders (Accounts and Records) Regulations 1992.

You’ll need to record these checks to satisfy us that you’ve carried them out.

We’ve reduced the requirements for avtur compared to those for other RDCO products. For instance, you do not have to submit a return if you only deal in avtur and no other controlled fuels. The records you must retain will depend upon the nature of the supply.

You must keep the information, set out below, in your normal business records. You do not have to keep it in a central or dedicated file.

Sales Information to be retained for your records
Sales made to another RDCO approved to deal in avtur (not to an end user) name of customer
delivery or invoice address
customer’s RDCO approval number
quantity supplied
All other (bulk) supplies (direct to end user or aircraft) name of customer
customer’s address and postcode
invoice address including post code
customer’s phone number — see paragraph 4.3
terms of payment
if appropriate, delivery address including post code — see paragraph 4.3
if collected, customer’s vehicle registration number
quantity supplied
delivery note signed by an authorised representative of the airline or aircraft (if direct to an aircraft)
aircraft identification number (if direct to an aircraft)
copy of document confirming aircraft ownership or use (if supply is not direct to an aircraft)

We may, for control reasons, impose further requirements by way of conditions on the information that you’re required to keep. These conditions will be notified to you in writing. This might include your obligation to check that your customer has suitably secure avtur storage facilities.

4.3 Provision of information by customers

We recognise that some information will not be relevant to certain customers and so you will not have to provide it. There may also be instances where your customer is unable to readily provide certain information.

Information Action taken
Phone number If you do not hold a customer’s phone number as part of your normal business practice, we’ll not insist that you obtain it for our purposes. If a phone number is obtained and this is just a mobile phone number, this should be considered with other indicators under paragraph 4.7 in deciding whether to make a supply.
Post code of delivery If you’re dealing with a new customer who does not have their postcode readily available, you do not have to insist upon the customer producing it at that time. You should ask the customer to supply it as soon as possible.

For new customers, we expect you to hold this information by the time of the third delivery. But where deliveries are irregular we would expect the information to be held earlier than this. Failure to capture this detail within a reasonable period may result in a penalty for failure to exercise your obligations, particularly if you continue to supply.

4.4 Customers who refuse to supply information

This section has force of law under Regulation 6 of the Revenue Traders (Accounts and Records) Regulations 1992.

As an RDCO, you have an obligation when selling or delivering avtur, and so you must take all reasonable precautions and exercise reasonable care to make sure that you only make supplies to customers who have a legitimate use for that oil.

The failure of customers to give requested information would be reasonable grounds for suspicion that the customer intends to misuse the avtur. Although it’s your decision whether you make the supply, you should bear in mind that without this information you will not be able to comply with your obligations to us, nor will you be able to undertake checks to satisfy yourself that the customer will not misuse the oil. You may, therefore, leave yourself open to sanctions — see section 7.

4.5 Discharging obligations

Merely recording this information does not discharge your obligations.

Although gathering this information will provide some of the material necessary upon which to make a decision about the legitimacy of the supply, you will still need to make that judgement based upon the indicators outlined in paragraph 4.7 of this notice.

This means that, under Regulation 8 (2) of the RDCO Regulations 2002, you must carry out the checks in paragraph 4.6 appropriate to your supply to satisfy yourself that the customer, and stated use of the avtur, is legitimate.

4.6 Guidance on the standard checks

There are a number of checks that you probably already undertake in line with CAA requirements and good commercial practice, like credit checks. However, you must perform the following checks to satisfy us that you have taken reasonable steps to make sure the legitimacy of the supply. You should read this in conjunction with paragraph 4.7, which advises you how to identify suspicious end use.

The following section has force of law under the conditions imposed under Regulation 8 (2) of the RDCO Regulations 2002.

When buying, selling, loading, unloading, delivering, moving or holding controlled oil, you must undertake the standard checks outlined in this section.

The standard checks:

Type of Supply Action to be taken When?
Supplies made to another approved RDCO Interrogate our secure internet site to confirm customer details by using HMRCs online Services or contact our imports and exports helpline If a new customer, check before making supply
If a confirmed RDCO and supplies continue, check quarterly to confirm their approval has not been withdrawn
If the period between orders is over 3 months, treat as if a new customer
Supplies collected by the customer Mark the vehicle registration number on the copy load ticket Every time avtur is collected from you
All other supplies Check the oil is not put directly into any machine other than an aircraft, such as a road vehicle. Notify us of any suspicions immediately.
See the information requirements in paragraph 4.2.		 Every time delivery is made

4.7 Checklist to identify suspicious end use

The following section has force of law under Regulation 8 (2) of the RDCO Regulations 2002.

There are circumstances, especially in combination, which could give rise to suspicion that a customer for rebated fuel may be misusing the product. These circumstances, which have been identified by the industry, are detailed below. If any of these indicators are present when someone orders avtur from you, you should report the facts to us, under Regulation 9 (2) of the RDCO Regulations 2002, see paragraph 4.10).

In the case of avtur, you must satisfy us you have taken steps to make sure it’s to be used in an aircraft engine.

Concerns at the point of ordering

  • mobile phone number given as the only point for contact
  • site occupied by the operator of plant or machinery other than aircraft
  • new customer with an apparent lack of concern with product price
  • customer offers to pay in full prior to delivery as an incentive
  • payment to be made in cash, by banker’s draft, by fuel card, or with a cheque from someone else
  • sudden large increase in volumes purchased by an established customer or increased frequency of repeat orders
  • delivery required into a road tanker, or other temporary storage, or to a number of seemingly unconnected delivery points
  • large quantities of avtur ordered by a transport company
  • aggressive or evasive responses to requests for detail

Suspicions should be passed on to delivery staff, by management, for possible confirmation during delivery (but only with caution).

Concerns at the point of delivery

Inappropriate product for the apparent site requirements, such as:

  • site occupied by the operator of a fleet of diesel-powered road vehicles, such as taxis or coaches, or subject to frequent visits by such vehicles
  • site occupied by the operator of plant or machinery other than aircraft
  • aircraft engine use seems unlikely in context of the evidence at the delivery point
  • nervous or unusual behaviour by persons on site, possibly with excessive site security for the type of business
  • location known to several drivers (especially those of other companies) or other indications of frequent or multiple deliveries
  • delivery required into a tank with a draw-off point at the bottom

Suspicions, or confirmed suspicions, must be reported back to management for action. Under no circumstances should they be made apparent to the customer.

4.8 Reporting your suspicions

If any of the above checks lead you to suspect that customers are not entitled to receive avtur or are using it for an improper purpose, report the facts to us — see paragraph 4.10, and keep a record of the suspicious circumstances and the action taken.

The following section has force of law under Regulation 9 (2) of the RDCO Regulations 2002.

If you have either a suspicion based on the checks carried out in paragraph 4.6, or you have evidence that the customer is making improper use of the avtur, by using it as fuel other than for an aircraft, you have a duty as an RDCO to notify us immediately, under conditions imposed by Regulation 9 (2) of the RDCO Regulations 2002.

Based on the checks you have made and the existence of any indicators in paragraph 4.7, you should notify us of the information that you have gathered using the imports and exports helpline and the reason for your decision if you decide not to supply.

You’re advised not to supply this customer if you suspect that they do not have a legitimate use for the avtur, under conditions imposed under Regulation 8 (2) RDCO Regulations 2002, unless we advise you otherwise.

4.9 Cause for concern after supply

When considering whether you have contravened the RDCO regulations or failed to comply with conditions, restrictions or requirements (including any obligations imposed on you in paragraph 4.1), the extent to which you have followed the guidance set out in paragraph 4.6 will be taken into account by HMRC.

Provided that this is not a regular occurrence and you:

  • notified us immediately
  • obtained the information set out in paragraph 4.2
  • undertook the checks set out in paragraph 4.6
  • made the supply in good faith

We’ll not hold you liable for any penalties, or other sanctions. However, we may ask you to review your procedures.

4.10 Concerns that the avtur you have supplied will be misused

This following section has force of law under Regulation 9 (2) of the RDCO Regulations 2002.

If you have any cause for concern that avtur you have supplied may be misused, you should notify us without delay of the customer name, address, post code and VAT number (if known), and details of the type and quantity of oil supplied.

You should not make any further supplies to that customer until you have carried out the additional checks in paragraph 4.7. If these checks satisfy you that the cause for concern was groundless, you may resume supplies to that customer.

If, however, you still have suspicions about the end use of any avtur you have supplied, you should contact us using the imports and exports helpline immediately.

If you suspect fraud, you must report tax fraud or avoidance to HMRC.

We’ll confirm receipt of any written notification from you, and will provide you with a unique reference number, which you should note in your records.

4.11 Checks carried out by your staff

You’re responsible for your staff and you will need to make sure that they are aware of the checks that they should be carrying out before making the supply. As an added precaution you should consider introducing your own management checks to make sure that your staff are making these checks and are exercising proper judgement in making the supply.

Similarly, if your employees are found to have been in collusion with a fraudulent customer, you’re ultimately responsible for their behaviour. However, providing you notify us immediately you become aware of the situation, we’ll take due regard of the action that you take against the employee, which may include dismissing the employee, or reporting the matter to the police.

4.12 Decisions on liability

It’s not the intention of the scheme to penalise you for genuine mistakes. In considering whether any action against you is appropriate, we’ll take into account your overall compliance with the scheme, the nature of the failing which led to you making the supply, and any other mitigating circumstances.

Where your failings resulted from non-compliance with the scheme, for example, failure to obtain any of the information at paragraph 4.2 or failure to undertake any of the checks set out in paragraph 4.6, we’ll investigate the cause to establish any reasonable excuse.

If there are no mitigating circumstances or your failings persist, it’s likely that we’ll take escalating action, such as the issue of warning letters followed by civil penalties. In the most serious cases we may also consider revocation of your RDCO approval.

Section 7 sets out the penalties, sanctions and guarantees.

We may, in exceptional cases take legal proceedings against you. For example, if you were knowingly involved in the supply and misuse of avtur, we’ll take action against you. To do this, we would need sufficient evidence against you to support a prosecution.

4.14 Customer violence

You must decide whether or not to supply, but we would not want you to put yourself or your staff at risk if there’s any threat of violence. If you do decide to supply, we’ll not hold you liable, providing you notify us immediately.

If you suspect fraud, you must report your suspicions to us online at report tax fraud or avoidance to HMRC.

4.15 Supplying a suspicious or fraudulent customer

The (exceptional) circumstances under which we may ask you to make a supply to a suspicious or fraudulent customer to assist us in enforcement action are governed by strict rules. We’ll not routinely ask you to continue making such supplies, nor should you act upon any request from our staff to do so unless you’re in possession of a written agreement.

4.16 Avtur used in private pleasure-flying

The full rate of duty — the heavy oil rate — applies to fuel used for private pleasure-flying. Users of fully rebated avtur for private pleasure-flying must pay ‘an amount equal to the rebate’, as ‘duty’, to us.

Suppliers of avtur must draw the attention of the customer to the requirement to pay us the duty, if they believe that the avtur being supplied may be used for private pleasure-flying.

You must therefore ask the customer about the intended use of the fuel. If the fuel will be used for private-pleasure flying, you must obtain a signed and dated declaration from the customer to that effect and retain it with your records for our future inspection. If the customer states that it’s not for private pleasure-flying, no declaration is required, but your records must be noted to that effect.

Some supplies will clearly be for commercial purposes, and if you’re a supplier, you will know your regular customers. It’s only if the final use is in doubt, or where the fuel is clearly for pleasure-flying, that you need to ask for a declaration.

Suppliers are not responsible for paying the duty. The user must pay HMRC directly within 30 days of the declaration date.

The wording of the required declaration is:

‘I declare that some or all of the avtur purchased is to be used for private pleasure-flying. I am aware that, on the quantity of avtur used for private pleasure-flying, I have a legal obligation to pay to HM Revenue & Customs an amount equal to the rebate allowable on a like quantity of kerosene at the time of this declaration.’

You may decide where to keep this declaration in your records, for example on a sales invoice. Whichever method you adopt, the declaration must be signed and dated by the customer, with their address details. It must also contain your name and address, and the quantity of avtur supplied.

More information on the supplies of avtur for private flying can be found in Fuel used in private pleasure craft and for private pleasure flying (Excise Notice 554).

5. Inward Processing Relief for avtur

5.1 General

For detailed information regarding Inward Processing Relief (IPR) you should refer to Customs special procedures for the Union Customs Code.

There are strict handling, storage, sampling and distribution requirements in relation to avtur. Avtur is subject to a form of processing other than ‘usual forms of handling’ for the purposes of eligibility for IPR.

Production of avtur in the UK and EU is insufficient to meet demand, so importations from outside the UK and EU are essential. For this reason, operation of the IPR regime is often an important factor in facilitating business. Applications for IPR approval in respect of avtur should be made under economic code 01.

Due to the nature of avtur, and the manner in which it’s stored and distributed, the physical separation of product subject to the IPR regime from product that is not can be impractical. Furthermore, it may not be possible to maintain stock records that differentiate avtur in free circulation from avtur which has been declared to IPR. If this is the case it will be necessary for any IPR approval to include authorisation for equivalence — see Pay less or no duty on goods you store, repair, process or temporarily use.

5.2 Discharging avtur from the IPR arrangements

You must retain detailed records of all consignments of avtur that are declared to the IPR regime on importation. To discharge your liability, you must dispose of IPR goods in an eligible manner. In the case of avtur this will usually be achieved by transferring it for use as fuel on foreign going flights. Supplies for use on flights solely within the UK are not eligible.

It’s essential that you’re able to monitor and control the volumes of product that are subject to the regime. To discharge your IPR obligations, you must be able to demonstrate that the volume of IPR avtur, or equivalent free circulation avtur, loaded onto foreign going flights, equals or exceeds the volume declared to IPR on importation during a given throughput period.

You will require evidence of eligible deliveries in the form of commercial documentation, which must be sufficient to provide an audit trail confirming the receipt of the avtur as fuel aboard foreign going aircraft. Unless otherwise agreed in writing with HMRC, commercial documents used to supply the fuel must clearly state the IPR approval holder’s authorisation number, the quantity of fuel, the aircraft flight number and destination. The authorisation holder should also obtain a stamped receipt from the aircraft operator. The exact form of evidence required will be considered during the application process and stipulated on your authorisation.

6. Avtur not used as fuel for aircraft engines

6.1 Other purposes avtur can be used for

Avtur can be used for other purposes, but if it’s to be used or disposed of other than as fuel for aircraft engines, or disposed of because it has been rejected for use as aircraft fuel (because, for example it has become contaminated or accidentally mixed), then in either case the oil is no longer classed as avtur but is now unmarked kerosene.

You must get authorisation from HMRC before using avtur for other purposes. We will only give authorisation in exceptional circumstances.

If we do authorise you to use avtur for other purposes, then one of the following will apply:

Dealers approved for deferment of oils excise duty may account for duty on Form HO10. Otherwise duty should be paid immediately on Form W50 to the National Warrant Processing Unit at the Mineral oils reliefs centre.

6.2 Refunds of duty on rejected avtur

If the full rate of duty has previously been paid on rejected avtur before any marking takes place, a refund of the duty can be applied for after marking. However, if avtur is returned to duty suspension or to the premises of a Registered Remote Marker (RRM), there will be no duty credit as the original delivery would have been at the fully rebated (nil) duty rate.

6.3 Penalties if avtur is used or disposed of other than as fuel for aircraft engines

Apply in writing if you have a requirement to use or disposal of avtur as outlined above. You need to demonstrate your need and then, if authorised, we’ll provide written permission and instructions on how to repay the duty. You should write to:

HM Revenue and Customs
Excise Fuel Duty Policy
4th Floor East
Trinity Bridge House
2 Dearmans Place
Salford
M3 5BS

Email: oils.policymail@hmrc.gov.uk

If this is not done, the full rate of duty may have to be paid and penalties may also be appropriate.

If in doubt about what you need to do, please contact our imports and exports helpline.

7. Sanctions and penalties

7.1 General

This section has force of law under the Hydrocarbon Oil (Registered Dealers in Controlled Oil) Regulations 2002 and The Revenue Traders (Accounts and Records) Regulations 1992.

We have the power to take action against you as explained in paragraphs 7.3, 7.4 and 7.5.

Our priority is that you understand your obligations and are able to comply with them, and wherever appropriate we’ll assist you to do so. However, we’ll take all circumstances into account in determining the appropriate response to non-compliance, and we have the power to take action against you as explained in paragraphs 7.3, 7.4 and 7.5.

The sanctions and penalties in paragraphs 7.3, 7.4, and 7.5 will be applied in an escalating scale of action against you, depending on the nature of the contravention. In the majority of cases we would expect that the lesser sanctions will have the effect of improving compliance, and that withdrawal of approval would be the exception rather than the rule. The action we’ll take is:

Stage Sanction
1 Warning letters
2 Civil penalties
3 Withdrawal of approval

All of these stages will be well documented and we’ll give you written notification at each stage. If you feel that you have a ‘reasonable excuse’ for any particular failing, you should make your case in writing and we’ll take it into account in deciding whether the sanction should be maintained.

7.2 Advice and guidance

Where we consider it’s appropriate and will be beneficial in improving compliance, we’ll offer advice to help you get things right before we consider taking any further action over a failure to comply with our requirements.

7.3 Warning letters

These will be issued where our advice has failed to resolve non-compliance or where we consider that advice is not the appropriate response, depending on the circumstances. If warning letters fail to resolve the non-compliance, we may proceed to civil penalties and, ultimately, withdrawal of approval.

7.4 Civil penalties

The penalties available to us are civil penalties of £250 for each contravention including, where appropriate, daily penalties of £20. Daily penalties will be applied from the 46th day after the original penalty was imposed if it remains unpaid.

Situations where such penalties may be imposed include failure to:

  • render returns by the due date
  • make complete and accurate returns

We recommend that you obtain and retain proof of postage when submitting your return.

There’s also a penalty for wrongdoing — such as knowingly supplying rebated fuel for road use, or putting controlled oil into a road vehicle.

This can be up to 100% of the duty due.

7.5 Withdrawal of approval

This situation is likely to arise where we’re not satisfied, or are no longer satisfied, that you’re a suitable person to be approved — see paragraph 3.6. Any decision to revoke an approval will not be taken lightly and will be fully supported by written evidence. In such cases, we’ll set out our reasons for refusing or revoking your approval in a letter.

7.6 Appeals

The above sanctions are subject to the appeal provisions contained in the Finance Act 1994. If we impose any of these sanctions, we’ll offer you a review and tell you about your right of appeal.

If you disagree with the decision, you may either accept the review offer or appeal to the independent tribunal. If you accept the review offer, but do not agree with the review conclusion you will still be able to appeal to the independent tribunal.

Read disagree with a tax decision for more information.

7.7 Assessments to the repayment of rebate

We have the power to issue a revenue assessment to any person who:

  • uses avtur as a fuel other than for an aircraft
  • is the person liable for the oil being taken into a vehicle or machine other than an aircraft

Providing you, as a dealer, are not involved in this fraudulent misuse of avtur, you will not be liable for the duty involved. Consequently, we would not seek recovery of duty from you. This applies even where you may have failed to carry out any checks, although in cases of such negligence you may render yourself liable to other sanctions such as a civil penalty or ultimately withdrawal of approval.

This will be established by reference to your compliance with the requirements of this notice.

If you supply avtur knowing it will be used other than in an aircraft, you will be liable to a penalty which can be up to the amount of duty evaded.

7.8 Criminal proceedings

If you’re involved in fraudulent activity in contravention of any of the relevant legislation, we’ll seek to prosecute. The extent of the evidence available will determine such action. Such proceedings may also seek to recover from you a repayment of the rebate of duty. There are severe penalties for fraud, unlimited fines, and up to seven years imprisonment.

8. Accounts and records

8.1 Accounting records that must be kept

If you supply or use avtur, you must keep suitable stock and commercial records and make them available at our request. You must also show in your records how you have disposed of the fuel, for example:

  • to other suppliers or users
  • as fuel for your own aircraft engines
  • for other purposes (but see section 6)

Paragraph 8.3 outlines the records that you must keep.

8.2 Units of quantity to use

You should normally declare the quantities in standard (at 15°C) litres. However, there are relaxations that may apply (see Appendix H of Motor and heating fuels general information and accounting for Excise Duty and VAT (Excise Notice 179)).

8.3 Information required

You will need to keep the information referred to in section 4, in particular the details of customers you have supplied and the checks that you have carried out (paragraph 4.6) and declarations obtained (paragraph 4.16).

The following particulars are normally to be included:

(a) Receipts and deliveries

  • date and movement
  • name and address of the consignor and consignee
  • identifying particulars of the carrying ship or vehicle
  • quantity and description of the oil
  • distinguishing marks and numbers of the vessels or places where the oil is stored (receipts only)

(b) Usage

  • date of use
  • quantity of oil used
  • any losses in transit

(c) Avtur destroyed

  • date of destruction
  • place and manner of destruction
  • quantity and description of the oil
  • whether the oil has been returned after delivery duty paid

(d) Oil marked

The accounts required are detailed in Motor and heating fuels general information and accounting for Excise Duty and VAT (Excise Notice 179) section 8 — these are:

  • the quantities of marker, or composite solutions, received, and details of the suppliers
  • the quantities of marker, or composite solutions, added each day to the avtur
  • details of the actual stocks of marker or composite solution held at the premises at the end of each calendar month, and at any time that our officer may require

8.4 How long to keep your records

You must normally keep your business records for six years. If this causes problems, ask either your CCM or our imports and exports helpline if you can keep some of your records for a shorter period. You must get our agreement before destroying any of your relevant business records that are less than six years old.

8.5 Keeping paper records

You can keep your records on paper, electronically or on microfilm or microfiche provided the records are legible and you provide the necessary facilities to read the records. You can also keep your records on a computer. Our officers will need to see the appropriate technical documentation as part of their visit.

9. Dealing with HMRC

9.1 What can be expected from HMRC

We’ll normally make an appointment to see you, and will try to make our visit with as little disruption to your business as is possible.

When we make our appointment we’ll tell you:

  • who we want to see
  • what records we want to see
  • how long we think the visit will take

You can find out more detailed information about how we visit businesses in about compliance checks: CC/FS1a.

9.2 What HMRC expect from you

We expect you to maintain your records in good order and allow our officers entry to your premises. We also expect you to have a duty of care to the taxpayer as well as to your customers. It would be helpful if you let us know if you believe oil is being misused. If you have any information, you can contact the Customs Hotline on Telephone: 0800 595 000.

9.3 Health and Safety

You must comply with all the legal provisions relating to health and safety, such as the Health and Safety at Work Act 1974. These provisions may include the need to display warning notices, and to issue health and safety instructions, to both staff and visitors.

If you issue special equipment, or protective clothing, to your staff when they are undertaking activities such as handling, inspecting, or sampling oils, then you must provide similar clothing and equipment to our officers when they undertake the same activities.

9.4 Powers of HMRC officers

Our officers may:

  • at any reasonable time enter premises or a part of a dwelling used in connection with the carrying on of a business (Customs and Excise Management Act 1979)
  • enter and inspect any entered or approved premises and any vehicle on those premises (Hydrocarbon Oil Regulations 1973 s47)
  • inspect, sample, examine, and, test oils (Hydrocarbon Oil Regulations 1973)
  • require the production of your business records, and remove or take copies of those records (Revenue Trader (Accounts and Records) Regulations 1992)

If you obstruct, hinder, molest, or assault an officer in the course of their duty then you may be liable to either an unlimited fine, up to two years imprisonment or both.

10. Warning notices to be displayed at duty-suspended mineral oil installations and remote marking premises

10.1 Duty-suspended installations

HMRC previously referred to duty-suspended installations as bonded installations. Existing warning notices, which refer to ‘bonded installations’ will continue to fulfil the requirements of this notice. Any replacements of existing notices should comply with the revised wording below.

Warehouse keepers and producers must make sure that sufficient warning notices in bold format are prominently displayed in such a way that all employees, carriers or visitors cannot fail to see them. The following notice is acceptable:

WARNING

Duty Suspension Installation

Duty has not been paid on the oil kept here

Removal without authority of any oil or removal without marking or colouring of oil which out to be marked or coloured may incur severe customs penalties:

  • fines
  • imprisonment
  • forfeiture of oil
  • forfeiture of vehicle

10.2 Registered Remote Markers (RRMs)

Operators should display warning notices in such a manner that all employees, carriers or visitors cannot fail to see them. The notices are to be in bold format and in the following text:

WARNING

Removal without marking of oil which ought to be marked may incur severe penalties:

  • fines
  • imprisonment
  • forfeiture of oil
  • forfeiture of vehicle

10.3 Reporting suspicious transactions

The minimum checks necessary to discharge your obligations in the supply of controlled oil are set out in paragraph 4.6. On occasion, despite the precaution of standard checks being followed there will be circumstances (especially in combination), which could give rise to suspicion that a customer may be misusing the product. These circumstances, which have been identified by the industry, are detailed in paragraph 4.7 of this notice.

If you have any suspicions about a customer to whom you have supplied oil you should report tax fraud or avoidance to HMRC.

Include the following information when notifying us of suspicious transactions:

  • date of supply
  • customer name
  • VAT registration (where known)
  • delivery address
  • vehicle registration (if product collected)
  • type of oil
  • quantity supplied
  • reason for suspicion

Your rights and obligations

Read the HMRC Charter to find out what you can expect from us and what we expect from you.

Help us improve this notice

If you have any feedback about this notice email: oils.policymail@hmrc.gov.uk.

You can also write to:

HM Revenue and Customs
Excise Fuel Duty Policy
4th Floor East
Trinity Bridge House
2 Dearmans Place
Salford
M3 5BS

You’ll need to include the full title of this notice. Do not include any personal or financial information like your VAT or company reference number.

If you need general help with this notice or have another question contact the HMRC Excise Helpline on 0300 200 3700 or contact the Mineral Oil Reliefs Centre.

Putting things right

If you’re unhappy with HMRC’s service, contact the person or office you’ve been dealing with and they’ll try to put things right.

If you’re still unhappy, find out how to complain to HMRC.

How HMRC uses your information

Find out how HMRC uses the information we hold about you.

Updates to this page

Published 1 May 2014
Last updated 7 February 2024 + show all updates

  1. Information about contacting the Mineral Oil Reliefs Centre has been updated.

  2. Section 6.1 has been updated to show you must get authorisation from HMRC before using Avtur for other purposes.

  3. We have added a link to the contact details for the HMRC Mineral Oil Reliefs Centre in sections 3.2, 3.7, 3.12 and 6.1.

  4. This page has been updated because the Brexit transition period has ended.

  5. First published.

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