HCOGAS500050 - Control Best Practice: Risks

The greatest risk to the revenue is that persons who ought to be paying duty will, through ignorance or design, avoid bringing themselves to our attention by failure to notify. The other major risk is that gas ostensibly for non-dutiable use may be diverted to road fuel use. The proportion of gas used for road fuel is very small compared to the amount put to non-dutiable uses (e.g. heating and cooking) and is on such a scale that diversions to road fuel use are difficult to detect. When making audit visits or approving the form of traders’ records officers should be aware that a person involved in the distribution or use of gas as road fuel who has ready access to other stocks of gas represents a particular revenue risk.

As with any instance of diversion of gas to road fuel use there is also a VAT implication. Gas used as heating fuel currently has a lower rate of VAT than for gas used as road fuel (VATNotice 701/19 Fuel and Power).

Liability to duty

To ensure traders fulfil their responsibilities for charging and accounting for the duty, officers should encourage trader compliance and ensure duty is charged at the earliest possible stage and on all the relevant stock.