Red Diesel FAQs: Laws, Tax, Usage, and Essential Guidance

As of 1 April 2022, red diesel tax rules changed to promote cleaner energy alternatives. Most industries lost their entitlement to use rebated fuel, with the government aiming to reduce carbon emissions and level the tax playing field across fuel types.

No, red diesel is not exempt from tax but is subject to a reduced rate of duty. However, recent changes mean only specific industries can still benefit from this rebate.

Eligible businesses can reclaim the tax on red diesel by submitting a claim to HMRC through their fuel duty rebate scheme, providing evidence of qualifying use. To find out more read the government website Gov.uk website.

To apply for approval:
Form HO27, available from the Gov.uk

Red diesel is legal when used within the regulations and for approved purposes, such as in agriculture or for non-road machinery. Using it outside these purposes is illegal.

Penalties include fines, seizure of vehicles, and repayment of the full fuel duty. HMRC conducts regular spot checks to enforce compliance.

Red diesel can be used by industries such as agriculture, horticulture, forestry, fisheries, and railways. Other industries, such as construction, lost eligibility in April 2022.

Vehicles such as tractors, agricultural machinery, and certain construction equipment can use red diesel, provided they operate off-road or in approved sectors.

No specific licence is needed to buy red diesel, but suppliers often require proof of intended use to ensure compliance with regulations.

Red diesel must be stored in a secure, bunded tank to prevent leaks and contamination. Farms must comply with Environment Agency regulations and ensure tanks are inspected regularly.

Driving on public roads with red diesel is generally prohibited unless it’s for specific purposes, such as gritting or agricultural activities.

No, red diesel cannot be used in private vehicles, even if they are operated solely on a farm. It is restricted to certain machinery and vehicles.

You should not drive the vehicle. Drain the fuel immediately and clean the tank. Inform HMRC if necessary to avoid potential penalties.

Yes, gritting vehicles are permitted to use red diesel on public roads due to their essential role in maintaining road safety.

Yes, tractors used for gritting public roads are allowed to use red diesel under government regulations.

Yes, as long as the tractor complies with legal guidelines and the fuels are used for their respective purposes.

The rules for using red diesel in backup generators changed in April 2022. Commercial generators are no longer permitted to use rebated fuels, restricting the use of red diesel to specific circumstances.

Red diesel is now allowed only for the following purposes:

• Agriculture, Horticulture, and Forestry: Vehicles and machinery in these industries can use red diesel, including for tasks like verge cutting, hedge trimming, snow clearance, and gritting roads.
• Railways: Passenger, freight, or maintenance vehicles designed to operate on rail tracks.
• Non-Commercial Premises: Heating and electricity generation in places like homes, places of worship, hospitals, town halls, and for off-grid power generation. It also includes non-propulsion uses on permanently moored houseboats.
• Community Sports Clubs and Golf Courses: Red diesel can be used for ground maintenance and heating or lighting of facilities like clubhouses and changing rooms.
• Marine Craft: All marine vessels operating in the UK, including fishing and freight vessels, except for private pleasure crafts in Northern Ireland.
• Travelling Fairs and Circuses: Machinery, including caravans, used by travelling fairs and circuses.

If your backup generator falls outside these categories, it must use white diesel or an alternative fuel. Always ensure compliance with the latest regulations to avoid penalties.

No, red diesel is not suitable for home heating. Kerosene is typically used for heating domestic properties.

Yes, red diesel can be used in pleasure crafts, but only for heating and power generation.

The price of red diesel fluctuates depending on market conditions. Contact us for the latest prices.

Red diesel is cheaper because it is subject to a reduced rate of duty, intended for specific industrial and agricultural use.

We are proud suppliers to the industries that are permitted to use Red Diesel, including the famous Tom Pemberton – call us on 01772 619 461.

Yes, red diesel can be purchased in barrels from suppliers, typically in 205-litre drums.

You can buy red diesel barrels from us, Compass Fuels, call us now: 01772 619 461

Attempting to remove the red dye is illegal and considered fuel fraud. Severe penalties apply for tampering with rebated fuel.

Yes, alternatives include hydrotreated vegetable oil (HVO) and white diesel, which are more environmentally friendly options.

Yes, red diesel is also known as gas oil, agricultural diesel, or tractor diesel.

Yes, a red dye is added to distinguish it from white diesel and identify its rebated status.

Blue diesel is identical to red diesel in composition, with the only difference being the dye used to color it. In some countries, such as France, Estonia, Portugal, Ireland, Spain, and others, rebated diesel is dyed blue instead of red to indicate its restricted use.

The BS 2869 specification defines the quality standards for gas oil, ensuring it meets requirements for use in off-road machinery and heating.

Contact us we are a licensed fuel disposal company and we can safely remove and recycle your unwanted or surplus fuel in compliance with environmental regulations. Call: 01772 619 461

No. HMRC is aware that there may be a transition period during which red diesel residue might remain in tanks or vehicles. However, stockpiling red diesel for future use is prohibited.

If you have surplus red diesel in your tanks after March 31st, 2022, you must:

1. Sell or give it to someone eligible to use it.
2. Sell or give it to a Registered Dealer in Controlled Oil (RDCO).
3. Dispose of it through an approved waste oil or recycling company.

Keep detailed records of any sales or disposals for compliance.

No, flushing out tanks is not required. HMRC recognizes that there may be residual red dye in machinery or vehicle tanks during the transition period.

You should maintain accurate records of all fuel purchases to demonstrate compliance. This includes ensuring you haven’t stockpiled red diesel and have begun transitioning to non-rebated fuels.

HMRC will take a reasonable approach. As long as you have invoices or receipts proving that you’ve transitioned to full-duty fuel, they are more likely to consider your case fairly. Continued illegal use of red diesel will result in penalties.

Yes, the same rules apply to HVO as other rebated fuels. If you are still eligible to use red HVO, the duty remains at 11.14 pence per litre. If you are no longer eligible, you must switch to white HVO, which is taxed at 57.95 pence per litre.