HMRC clamps down on red diesel fraud

Fraudsters will find it harder to strip the colour out of red diesel and kerosene after HMRC begins introducing more resilient dyes.


The improved markers are being added to fuels in the UK and Northern Ireland in a bid to curb the illegal practice of laundering, which involves stripping the coloured dyes out of fuels before selling them on at a profit.


See also: Dissecting red diesel rules


Launderers primarily target red diesel (green in Ireland), filtering it through chemicals or acids to remove the marker. These can remain in the fuel and damage fuel pumps in diesel cars.


“The use of illicit fuel is not a victimless crime; it robs the government of tax revenue that is used to fund vital public services and puts those businesses that follow the rules at a commercial disadvantage.”
Nicky Morgan, Treasury economic secretary

The use of illicit diesel is estimated to be 12-13% of the market share in Northern Ireland and about 2% in the rest of the UK.


HRMC says the tougher dyes are resistant to all known laundering techniques which will make it much more difficult to tamper with.


Nicky Morgan, economic secretary to the Treasury said: “The use of illicit fuel is not a victimless crime; it robs the government of tax revenue that is used to fund vital public services and puts those businesses that follow the rules at a commercial disadvantage.”


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