Red or White

What has this got to do with smallholding? Well in this article I am going to look at some of the issues about what fuel you can and cannot use in vehicles that you might own and are linked to your smallholding activities. As this subject is linked to how a vehicle is licensed by the Driver and Vehicle Licensing Agency (DVLA) for Vehicle Excise Duty purposes (which I will now refer to as 'Road Tax'), I will look at some of those conditions and exemptions as well.

Why is Diesel Different Colours?

Diesel for road vehicles is known as DERV (Fuel for Diesel Engined Road Vehicles) or ULSD (Ultra Low Sulphur Diesel which has a reduced sulphur content) and is white in colour. A red dye is used to mark diesel fuel which has a restricted use because it is subject to a lower rate of duty .This is referred to as rebated fuel and called gas oil.. Thus if you only ever use white diesel which is subject of the full duty you do not need to consider the matter any further. The difference in the duty paid per litre can be as much as 49 pence so it is obvious why red is attractive to use.

In practice a Police or Customs Officer may dip your tank and if the diesel fuel looks red, further investigations might follow. These could include proving what the vehicle is being used for at the time, checking its 'Road Tax' classification and an analysis of the fuel by HM Revenue and Customs in a mobile laboratory.

When Can I Use Rebated Fuel?

As a general rule, the law requires that all road vehicles must use fuel on which duty has been fully paid i.e. 'white' diesel for diesel fuelled vehicles. Kerosene (paraffin) is also a fuel whose use is subject to restrictions and is dyed a pale yellow colour as it has no duty at all on it. In this article, however, I am concentrating on diesel fuel.

The permitted use of red diesel (rebated fuel) in vehicles on roads maintained at public expense is based on the principle that it may only be used when the travel on such roads is both limited and incidental to the main use of the vehicle.

HM Revenue and Customs published "Notice 75" about the fuel that you can legally use in a road vehicle in December 2002 and this can be seen on their website www.customs.hmrc.gov.uk or phone their National Advice Service on 0845 010 9000 (8am to 8pm Monday to Friday). Welsh speakers should ring 0845 010 0300 (8am to 6pm Monday to Friday).

Section 8 of this notice lists 'Excepted Vehicles' i.e. those allowed to use rebated fuel. These include: A vehicle not used on a public road and unlicensed (no 'Road Tax') An agricultural tractor used on public roads solely for purposes relating to agriculture, horticulture and forestry, cutting verges bordering public roads and cutting hedges or trees bordering public roads or bordering verges which border public roads.

Thus a tractor on a 'Road Run' or to or from a show would not come within this definition and must use white full duty paid diesel.

Light agricultural vehicles - these are designed and constructed to seat the driver only and primarily for off road use with a revenue weight not exceeding 1,000 kilograms. Also it must be used solely for purposes relating to agriculture, horticulture or forestry e.g. a self propelled harvester.

Agricultural engines e.g. a combine harvester Limited Use Vehicles; these are used for the purposes of agriculture, horticulture or forestry and only used on public roads passing between different areas of land occupied by the same person with the distance between two such areas not exceeding 1.5kilometres. .

What Conditions Do HM Revenue and Customs Impose If I Store Both Red And White Diesel On My Holding?

If you store both red and white diesel on the same premises, the outlet on the tank or container for the red must be indelibly marked or labelled.

What Could Happen If I Got Caught Misusing Rebated Fuel?

A penalty of £250 may be imposed and the duty rebate recovered The vehicle may be seized and forfeited If the vehicle owner or user's conduct involves dishonesty, a penalty of up to 100% of the duty evaded may be imposed Obstructing a Customs Officer carrying out his duty may result in an unlimited fine or imprisonment of up to two years or both.

Changes in the Law HM Revenue and Customs is proposing new legislation in April 2007 which will amend the 'Excepted Vehicles' list. These proposed changes include: vehicles licensed after 31st January 1998 but subsequently not used on a road who require a 'Statutory Off Road Notification' (SORN) if untaxed will only be allowed to use rebated fuel if such a declaration has been made. (A SORN is required anyway by the DVLA in these circumstances and it is an offence not to do so).

A new category will be introduced to cover material handlers used solely for purposes relating to agriculture, horticulture or forestry.

'Road Tax' and Fuel Duty The permitted use of rebated fuel is to a certain extent linked to 'Road Tax' although of course the money for each is collected by two different government agencies and covered by different legislation. Some 'Road Tax' exempt catagories that might be of interest are; Old Vehicles - vehicles constructed before 1st January 1973 that are not used for hire or reward or in connection with a trade or business Tractors/Agricultural Engines Agricultural lift and loading vehicles; these are designed for off road use, to lift and load and used solely in agriculture, horticulture or forestry e.g.material handlers Limited Use Vehicles (defined previously in section 'When Can I Use Rebated Fuel?') All of these still require a nil duty rate tax disc for use on a Public Road.

These exemptions and others can be viewed on the DVLA website www.dvla.gov.uk/vehicles/exemptions.htm. The DVLA can also be contacted by phone for vehicle enquiries on 0870 240 0010 between 0800 and 2030 Monday to Friday and 0800 to 1730 on Saturday or by email on vehicles.dvla@gtnet.gov.uk.

If a tractor is registered with the DVLA in any category other than an 'agricultural machine' e.g. in the Historic Vehicle taxation class, then it must use 'white' diesel at any time both on and off the road.

Some Considerations Re 'SORNs' If a vehicle is subject of a Stautory Off Road Notification (SORN) to the DVLA and is found being used on a public road, then an offence is committed and also any Road Tax due will be sought by the DVLA.

It is worth noting that any vehicle registered with the DVLA but not taxed since 31st January 1998 does not come within the SORN system. However, if that vehicle is taxed now or in the future and it is then decided not to re- tax it, the SORN system kicks in.

For example, I have a Fordson Dexta tractor which I use on my holding which was first registered with the DVLA in 1962 and I have a current V5C Registration Certificate for it.(If you still have a V5 for your vehicle then you need to get it replaced as soon as possible). I have no idea when it was last taxed but it was certainly before 31st January 1998. I therefore do not have to complete a SORN. I could obtain a tax disc tomorrow at no cost but if I did and then decided not to re-tax it, I would then have to complete a SORN.

And Finally.

A useful general website is www.info-manager@agricultural-vehicles.co.uk which answers varied questions about the law relating to agricultural vehicles including red diesel if you click on the 'questions' tab.

It may all come down to whether or not you can obtain red diesel easily even if you are permitted to use it. I do not know of anywhere locally that I can obtain it in small amounts and I do not want to store it on my holding in large quantities. Apart from issues around the cost of approved storage methods, there is also a risk of it being a target for theft. I think I will stick to white from the local garage!!

This article has been compiled from HM Revenue and Customs and DVLA sources and is my non -expert understanding of the subject. My advice is always check with the appropriate authorities if you are in any doubt.