HM Revenue and Customs Brief 02/08
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Issued 10 January 2008
Memorandum of Agreement on the use of agricultural vehicles on the road
A Memorandum of Agreement has been published on 10 January, clarifying what
uses of agricultural vehicles on the public road qualify for entitlement to use
red diesel and exemption from vehicle excise duty.
Tractors, agricultural engines, agricultural material handlers, light
agricultural vehicles, and vehicles used between different parts of land, as
defined in Schedule 1 of the Hydrocarbon Oil Duties Act 1979, are excluded from
the definition of road vehicles, and are therefore permitted to use rebated gas
oil, also known as ‘red diesel’. Red diesel has a duty rate of 9.69 pence per
litre (ppl), compared with 50.35 ppl for road fuel. These vehicles are also
exempt from vehicle excise duty, under Schedule 2 of the Vehicle Excise
Registration Act, 1994.
The definitions of these vehicles contain restrictions on the purposes to
which they can be put. Further clarification has been requested as to what
constitutes acceptable use that qualifies for entitlement to use red diesel and
exemption from vehicle excise duty, and in particular on the interpretation of
'purposes relating to agriculture, horticulture or forestry'.
HM Revenue & Customs and the Driver Vehicle Licensing Agency have been in
discussions with the National Farmers Union, the National Association of
Agricultural Contractors and the Confederation of Forest Industries to reach a
common interpretation of legislation. These discussions have resulted in the
publication of a
Memorandum of Agreement on the use of agricultural vehicles on the road.
The purpose of this Memorandum of Agreement is to provide guidance to those
engaged in agriculture, horticulture and forestry, and to agencies enforcing
compliance with the legislation. Where disputes arise these will continue to be
considered on an individual basis with regard to the relevant legislation.
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© Crown Copyright 2008.
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updated regularly and may be out of date at time of reading.
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Article Published/Sorted/Amended on Scopulus 2008-01-11 01:27:42 in Tax Articles
