HM Revenue and Customs Brief 31/11
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Issued on 3 August 2011
Excise duty: notification of inclusion of fuel additives
within Control and Movement Directive
Purpose of this brief
This Revenue & Customs brief provides information on
changes that are being made to the treatment of fuel additive products
falling under commodity code 3811. These changes will take effect from
1 July 2012.
Who needs to read this?
If you produce and/or import fuel additives covered by the
commodity code 3811 you may be affected by a change to EU treatment
that will alter the status of the goods. Commodity code 3811 includes
anti-knock preparations, oxidation inhibitors, viscosity improvers,
anti-corrosive preparations and other prepared additives, for mineral
oils (including gasoline) or for other liquids used for the same
purposes as mineral oils.
This change means that the goods are subject to EU control and
movement provisions and that they will have to travel under Community
duty suspension arrangements between approved tax warehouses. Movements
of fuel additives will be controlled using the electronic Excise
Movement and Control System (EMCS). If you do not have tax warehouse
approval excise duty will be due on production and/or importation.
A European Court of Justice (ECJ) decision on 18 December 2008
ruled that hydrocarbon oils duty must be applied to fuel additives,
because they are either mineral oils, or special energy products. The
ECJ ruling upheld the UK's long-held policy that fuel additives were
subject to excise duty. However, under the Energy Tax Directive
(2003/96/EC Article 20(1)) additives classified under commodity (CN)
code 3811 do not have to be warehoused and held or moved in duty
suspension as other motor and heating fuels have to be.
As a result of the ECJ ruling, the Netherlands formally
requested that products with CN codes 3811 should be subject to the
provisions contained within Directive 2008/118. This Directive repealed
the previous Holding and Movement Directive 92/12/EEC.
We have informally consulted businesses likely to be affected
by this proposal through our regular trade contacts. A small number of
the small and medium-sized companies consulted expressed a strong
reaction against this move. They cite increased costs and more time
spent completing Electronic Accompanying Documents (eAD). Larger
companies that we consulted via the relevant trade body (UKPIA) were
largely supportive of the proposal, saying that a consistent approach
may be an advantage. However, despite these supportive comments, most
were not prepared to go further than this and were largely ambivalent
about the need for change. The UK delegation has consistently argued
against this proposal as we do not accept that there is a need for
change. We are also concerned about the extra administrative burden
that will be placed on some affected businesses.
Excise Committee decision
This proposal was formally debated and voted on by EU Member
States at the Excise Committee on 8 July 2011. The UK voted against it,
but the proposal was adopted under qualified majority voting
As a result fuel additives will become subject to the Control
and Movement Directive (2008/118) from 1 July 2012. This represents a
six month deferment from the original date proposed by the Commission.
We intend to use this period to publicise the changes and offer help
and advice to affected businesses.
What do I need to do now?
You may already be approved as a tax warehouse, in which case
you will not need to apply for re-approval. However, you will need to
amend your approval to include fuel additives within your existing
approval. You can find out how to amend your approval from the guidance
contained in section 4 of Notice
196 Excise goods: authorisation of warehousekeepers and approval of
If you do not have warehouse approval, and you wish to move
these products under duty suspension arrangements, you should apply
following the guidance in section 3 of Notice 196. If you do not apply
for approval as a tax warehouse, then you will have to account for
excise duty upon production or importation of the goods.
Fuel additives are treated in the same way as other oil
products that move under duty suspension arrangements. The products
must move between tax warehouses and with the relevant accompanying
document. These are called Electronic Accompanying Documents (eAD)
which are submitted using the EMCS provisions.
Please see Public
Notice 179 for further details on oils warehousing. General
warehousing and movement issues are covered by
Public Notice 197.
Read the EMCS guidance.
Further help and advice can be obtained from the Oils Policy
team in Manchester:
Tel: 0161 827 0910
About the Author
© Crown Copyright 2011.
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for educational / informational purposes only. Article reproduced by
permission of HM Revenue & Customs.
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Article Published/Sorted/Amended on Scopulus 2011-08-04 14:25:12 in Tax Articles