HCOGAS400150 - Technical Guidance: When is the excise duty due?

The rate of excise duty on road fuel gas is set by the Chancellor and is charged per Kilogram. The current rate of excise duty is shown on the HMRC websiteand in the Customs and Excise Tariff.

The duty is due when gas is:

  • “Sent out” from the premises of a producer or dealer for use as fuel in a road vehicle. “sent out” means delivery against an order which states either that:
    • the gas is for use as road fuel; or

the excise duty is to be charged.

  • “Set aside” for use in a road vehicle.

“set aside” means when any action is taken which clearly shows that gas is intended for use as road fuel. For example when gas on which the duty has not been previously paid is:

I Received into a vessel which is marked to show its contents are:

    • duty paid; or

intended for use as road fuel; or

II Connected by cylinder or bottle to a road vehicles fuel supply.

  • Taken into the fuel supply of a road vehicle

If a road vehicle carries gas-powered equipment (e.g. refrigerating apparatus or an exhaust gas purifier) the gas for such equipment is liable to duty if it is drawn from or connected to a supply which is also used to propel the vehicle, even though such equipment does not contribute to the propulsion of the vehicle. Gas for use in such equipment is not liable to duty if it is drawn from an independent supply.

When is excise duty not chargeable?

Excise duty is not chargeable when gas is used for:

  • Heating.

Industry.

Scientific, etc purposes.

Value Added Tax

Liability to VAT is covered in VAT leaflet 701/19/95 (Fuel and Power). Briefly, VAT is chargeable at the standard rate on gas for use as road fuel. It is calculated on the duty paid price when it is supplied by a taxable person by way of business.