HMRC to Review Rebated Fuel
The spring Budget has announced that the government will be asking for evidence to support the use of rebated gas oil (often called red diesel) to improve its understanding of eligible industries and current use.
The National Association of Agricultural Contractors (NAAC) will be reviewing the call for evidence to be published on 20 March 2017.
Whilst the document highlights, in particular, a review of use in urban areas the NAAC will keep a watching brief on agricultural use and will press for the continued use of red diesel in modern farming and horticulture.
Agricultural journeys are still ‘incidental’ to the overall farming operation, and whilst the industry cannot argue that machinery may have to travel a greater distance on the road to the field, the purpose of the journey is exactly the same as when the original legislation was agreed i.e. agricultural, with the majority of use ‘off-road’ on the land producing food and maintaining the countryside.
The Association does not condone the inappropriate use of red diesel, particularly if carrying out non-agricultural work or particularly haulage in preference to other more suitable heavy goods vehicles, which are not allowed to use rebated fuel.
However, the NAAC will be pressing to retain the right that contractors can operate as ‘farmers without land’ and must be allowed to work without discrimination, on a level playing field with farmers. Contractors are now an integral part of the agricultural industry, with an estimated 91.5% of farmers using contractors.
The NAAC was heavily involved in the last consultation on rebated fuel in 2005 and the subsequent Memorandum of Agreement put together with the industry.
Formed in 1893, the National Association of Agricultural Contractors (NAAC) is the representative organisation for agricultural and amenity contractors in the UK who supply all types of land-based services to farmers, government, local authorities, sports and recreational facilities.