Red diesel Q&A: HMRC rules untangled

It is regularly quoted in farming circles that the use of red diesel is a very grey area, but the rules are actually pretty black and white and the Memorandum of Agreement in HMRC’s Notice 75 on the Gov.uk website makes it very difficult to claim otherwise.

Agriculture accounts for about 7% of the total rebated fuel use in the UK, with significant taxation benefits for the farming industry, and it is vital that the industry carefully adheres to the rules to help safeguard future use of the fuel.

See also: Converting your truck to red diesel use – how to stay legal

A key rule of thumb is that any use of red diesel on the road must be an integral part of an agricultural, horticultural or forestry operation and, significantly, cannot just be haulage.

Also, if you use the vehicle on public roads for a mixture of agricultural and other, non-agricultural activities, the vehicle no longer legally qualifies as an “excepted vehicle” and must be fuelled with white fuel at all times. 

The following questions will focus on where using red diesel is permitted for farming activities to help clarify many of the common grey areas.

These questions need to be read in conjunction with the HMRC Notice 75 which gives a clear explanation of what qualifies as “agricultural use” and what types of agricultural vehicles qualify.

How far can I travel using red diesel?

There are no distance limits on the use of red diesel in agricultural vehicles involved in an agricultural activity. However, if you are moving produce you must consider if you need an operator’s licence when travelling more than 15 miles from your base.

I am a contractor, travelling to farms to carry out cultivations work, including ploughing, harrowing and drilling. Can I travel to and from the farms on red?

Yes, contractors are allowed to use red diesel provided you are travelling to or returning from the farms to carry out agricultural work, or you are taking materials or equipment needed for that work.

The Council has invited me to tender to cut roadside verges and hedges using a tractor. Do I need to include an extra charge for using white diesel?

No, provided you don’t use your vehicle on the road for any other non-agricultural work. It specifically states in the law that agricultural tractors can use rebated fuel to cut hedges, trees and verges that border public roads.

How far can I travel if I’m using red diesel to haul straw that I buy in swath and bale before taking it off the field over the few weeks after harvest?

There is no distance limit for the use of red diesel. However, you can only use rebated fuel if you are involved in the agricultural operation that produced the straw, such as baling.

Can I just move straw off the field on red diesel?

No. If you have not been involved in the agricultural operation and are simply hauling the straw, you must use white diesel.

How do I prove that I have been an “integral part of the agricultural operation”?

Up-to-date record keeping is vital, as this is the best way to prove that you have been involved in an agricultural operation. This means a trail of contracts, job sheets, invoices and receipts. This is very important, particularly for contractors, to substantiate that all work carried out using red is valid.

I have new tenants in a farm cottage and need to move some furniture with my tractor and trailer?

This is not a legitimate use of red diesel. It is not an agricultural operation, which is defined as the growing or harvesting of crops or the rearing of animals for food, wool, leather, fur or other substances.

I use my tractor for farm work, but also haul materials for a local building firm and move soils from construction sites. How do I stay within the law? Can I use dual tanks, or perhaps just pay the extra tax when I should be using white diesel?

Using red diesel is legal only in a tractor used solely for agricultural use. This means that if you also take on non-agricultural jobs, then you must use white fuel for all the work you do, whether it is agricultural or not.

In addition, a tractor taxed as an agricultural vehicle must also only be used for agricultural activity. So, if it’s not agricultural you cannot be agriculturally taxed without breaking the law and risking prosecution.

Switching fuels over is also pretty treacherous, as it is very difficult to get all traces of red out of the tank, particularly now covert markers are being used to identify fuel. If your fuel is tested on a non-agricultural job your tractor is likely to be seized if there’s any trace of fuel markers.

One solution, if all the non-agricultural work is done off-road, is to move the tractor on a low loader. For fuel duty purposes, as long as you only use the road for agricultural work, red diesel can be used off-road whatever the activity.

Dual tanks are illegal and not an option, therefore the simple answer is you cannot have an agricultural tractor if your use of public roads is for a mixture of agricultural and non-agricultural purposes. It needs to be used on public roads solely for agricultural purposes or re-taxed and put on white.

If I am caught out using the wrong fuel, how far can HMRC trace my business back?

HMRC have the powers to assess for additional duty going back four years. If you are found to have been using tractors on red for non-agricultural jobs over that period it could get very expensive.

I am running a classic tractor charity rally around local country roads. I have been told it isn’t appropriate to use red diesel for this?

Correct – this is not an agricultural operation. As it is a leisure pursuit, the tractors must be run on white fuel.

I have diversified and have a livery stables within the farmyard. Can I use red diesel to move manure in and out of the yard for my equine clients?

No, the keeping of animals for sport and recreation is not considered to be agricultural.

My farm contracting business has grown considerably due to our local AD plant. I have two self-propelled forage harvesters and am involved in contracting services planting and harvesting the maize feedstock and taking it into the AD plant. I sometimes harvest and move the maize to a farm field-side clamp, then move it into the plant when it is required. Can I used red diesel?

Yes, as your services are an integral part of the agricultural operation. If you were only employed to move the maize into the AD plant, without being directly involved in growing and harvesting the maize, then you would need to use white diesel as this would be haulage.

I also have a low-injection spreader which I use to apply digestate from the AD plant. I transport the digestate from the AD plant and then spread it on farmland. Can I use red diesel?

Yes, as you are part of the agricultural operation.

I have been asked by my local sports club if I can use my tractor to keep the sports pitches maintained, fertilised and mowed. Can I used red diesel to travel to the playing fields?

No. HMRC does not recognise maintenance of sports pitches as horticultural use, so if it travels on the roads for this reason then it must be fuelled with white diesel. If the tractor is taken on a low loader the off-road work can be done on red. 

Alternatively, a self-propelled mower can legitimately be run on red at all times.

I need to use my tractor for drainage work and clearing ditches which run across my farmland.

You can use red diesel as long as the work is being done for the benefit of land used for farming.

I have also been asked to do additional ditch clearing for a neighbouring housing estate to prevent flooding. Can I use red?

No. It is not permitted to use red diesel for flood protection, so any additional flood protection/non-agricultural drainage work would mean the tractor had to be put on white diesel (unless the work doesn’t involve using public roads).

I want to tow a van behind my tractor/trailer to the field to get staff back to base to avoid unnecessary journeys to and from the field with big heavy slow machinery. Can it be towed using red diesel?

No the movement of a non-agricultural vehicle (van, car, caravan) is not allowed using red diesel, as it is not agricultural use.

I am employed by a farmer to move sugar beet from a field clamp to a factory. Can I use a tractor licensed as an agricultural machine and running on red diesel on the public road?

No, this is a haulage operation unless you were also directly involved in growing or harvesting the sugar beet.

I need to fetch some roof sheets to fix my farm store and need to collect them from the local agricultural country store. Can I take my tractor and trailer on red?

Yes, as you are allowed to use red diesel to transport materials and equipment to repair and maintain your own farm buildings (but not the farmhouse).

I was stopped by an “HMRC officer” but I am not sure it was legitimate. How can I be sure?

Firstly, your vehicle is not likely to be flagged down and stopped by HMRC. It is more likely to have its fuel tested as part of a wider vehicle check involving the police or Vosa.

HMRC officers would be able to show you a form of identification and would normally be in uniform and in identifiable vehicles.