Fuel rules are made clear

12 March 1999

Fuel rules are made clear

Red diesel or Derv? Just

where red diesel can be

legally used and in which

vehicle types are questions frequently asked by the

agricultural industry.

Ian Marshall contacted HM

Customs and Excise to

discover the definitive


THE key to understanding when it is legal to use rebated, or red, diesel lies in HODA, the Hydrocarbon Oil Duties Act 1979.

The Act was updated on Jul 1 1995 and schedule 1, referring to tractor definitions, states: "A vehicle is an excepted vehicle if it is an agricultural tractor or an off-road tractor."

The term "agricultural tractor" means a tractor used on public roads solely for purposes relating to agriculture, horticulture, forestry or activities such as cutting verges bordering public roads, or cutting hedges or trees bordering public roads or bordering verges which border public roads.

The term "off-road tractor" means a tractor which is not an agricultural tractor and is designed and built for use primarily in off-road circumstances. Such machines should also be incapable of exceeding a speed of 25mph.

These are usually large vehicles used in quarries or land levelling sites and, as such, have little connection with what most would understand as agriculture.

A farmer is entitled to use red diesel in a tractor if it is used solely for agriculture. Agricultural use by that farmer will include moving his agricultural equipment to other farms for agricultural use, movement of produce or animals to market, collection of items for his own farm from wholesalers or distribution points, movement of items from one part of the farm to the other.

The problem comes where the farmer has diversified into other non-agricultural areas, or they use a contractor to carry out the work.

Take, for example, the recent growth in removing waste from a processing plant and transferring it to a farm for ploughing into the land as a fertiliser. This business is deemed not to be solely agricultural and vehicles used on this type of work must be fuelled with Derv.

Contractors may also have problems deciding whether their work meets the solely agricultural definition. Recognising that some contractors will sometimes use their vehicles for agricultural use (red diesel) and sometimes for non-agricultural use (Derv), it has been agreed that fuel tanks can be drained and fuel switched.

Where, for example, a contractor is asked to cut, bale and transport hay for a farmer, the whole activity is deemed to be agricultural and red diesel can be used throughout. But if the contractor was asked just to transport the already baled hay it would considered to be haulage and red diesel could not be used.

There is no distance exemption when deciding on the test for red diesel, if the work is solely agricultural the vehicle is not restricted in the distance it can travel using that fuel. There could well be other limiting factors, though, in terms of road tax regulations. &#42


If a vehicle, including a tractor, is detected using red diesel illegally the penalties imposed will vary according to circumstances. This will vary from the minimum of £250 for fuelling the vehicle with red diesel, another £250 for using the vehicle with red diesel (a total of £500), up to a maximum of seven years imprisonment and an unlimited fine.

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