Commercial oil for business

From 1st April 2022, strict legislation was introduced which means many sectors and businesses lost their entitlement to use red diesel, so will now have to use more costly white diesel or look at alternative fuels. For further guidance as to whether your business can carry on using red diesel, click here or call us on 01423 770 668 and we will be happy to advise and provide support concerning the recent changes in red diesel taxation. Alternatively, you will find further information on the HMRC website.

Red diesel is heavily rebated in order to reduce financial pressure on vital industries such as agriculture and horticulture and, as it carries less tax than white diesel, significant savings can be made by those who can legally purchase and use red diesel. The VAT rate on red diesel is 5% on quantities of up to and including 2,300 litres, but for quantities above 2,300 litres the VAT rate increases to 20%, whereas white diesel (also known as derv) is taxed at 20% irrespective of the quantity purchased.

If you now have to use white derv in heating applications such as commercial boilers, heaters and dryers, you could make big savings by switching to our GO:35.  It’s a cost-effective, drop-in alternative with the same calorific value as red diesel, but it doesn’t attract excise duty. Click here to find out more or call us on 01423 770 668 for a competitive quote and to start making savings now.

Alternatively, you could consider switching to LPG, a highly efficient and cost-effective solution for a range of business sectors. We can provide free expert advice on how you can keep your business running efficiently and profitably – just call us on 01423 772 789 to discuss switching to LPG or click here to find out more.

No, there is no requirement for a license in order to purchase red diesel fuel, but you will need to confirm with the company you are purchasing it from that you intend to use it legitimately. You must only buy red diesel, otherwise known as gas oil, from a company that’s HMRC registered, and you will need to fill out a Red Diesel RDCO form to confirm this, and if the company you are buying from suspects illegal use, they have the right to pass on any information about your red diesel purchase to HMRC.

In certain circumstances, the answer to this question is yes. But, it’s important to remember that the rules refer to how red diesel is used, not who uses it. Red diesel can only be used on the road by ‘exempted’ vehicles, and to qualify vehicles and machinery must be engaged in agriculture, horticulture, fish farming or forestry-related activity. This includes vehicles used for cutting verges and hedges, snow clearance and gritting roads, and they must be registered as being in agricultural use. As long as you are performing an agricultural task, you can travel as far as you like on red diesel. Further information including a full list of vehicles that can continue to run on rebated fuel can be found on the HMRC website.

As gas oil is not permitted for use on public roads, it is illegal to run your vehicle on it unless for agricultural purposes. Red diesel contains a dye which is harmless and won’t negatively affect your engine, but it is there to help HMRC enforce the law and to prosecute fraud where fuel has been used illegally. Whilst you can drain the tank of all the fuel, the red dye is designed to linger so will still leave a trace in your fuel tank. You should contact HMRC immediately and follow their instructions.