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It’s illegal to use ‘rebated fuel’, commonly known in the UK as red diesel, for ordinary road use. But it’s much cheaper, so the inevitable takes place. Now HMRC has a new weapon in the fight against the fraudsters

HMRC is stepping up the fight against the use of illicit diesel and has recently co-operated with the Irish government in a move that will boost both countries’ fight against illegal fuel ‘laundering’.

If you’ve ever been tempted, think again.

What’s rebated fuel?

Rebated fuel, diesel in practice, carries less excise duty than standard road diesel, so it’s considerably cheaper – by nearly 50p a litre compared with the stuff on the forecourt.

Legally, the use of rebated fuel is limited to specific uses, mostly in agriculture, construction and heating, and markers are added to distinguish it from standard fuels. But crafty crooks remove the marker so they can sell it on at a profit for use on the road. If you’re ever offered cheap fuel, beware.

The use of illicit diesel is reckoned to account for 12-13% of the market in Northern Ireland and around 2% in the rest of the UK.

The joint accord will see the introduction of a new marker that will be added to so-called ‘rebated fuels’, including what’s commonly known in the UK as ‘red diesel’.

The new marker, produced by The Dow Chemical Company, will make rebated fuel much harder for fraudsters to ‘launder’ by removing the marker and selling it on at a profit.

The new marker will help HMRC and the Irish Revenue Commissioners tackle the criminal market in off-road diesel – marked with a red dye in the UK and green in Ireland – as well as kerosene used for heating oil.

“This has to be good news to help reduce fuel laundering,” the Freight Transport Association told Business Vans.

The FTA has suggested additional measures to stamp out the practice of using or laundering ‘off-road’ diesel:

  • Confiscation and sale of any vehicles found using laundered fuel, even in cases of first offence;
  • Removal of haulage/passenger licences from operators caught using laundered fuel;
  • Confiscation and sale of land/premises where fuel laundering is taking place, even for a first offence;
  • Minimum prison sentencing for those involved in fuel laundering.

In the UK, red diesel excise duty is charged at 11.14 pence per litre instead of the full rate of 57.95ppl. And excise duty on kerosene, used for heating, (which will also have the marker added to it) has a zero duty rate.



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