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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 This Directive repealed the previous Holding and Movement Directive 92/12/EEC.

UK position

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 procedures.

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 premises.

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

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Crown Copyright 2011.

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Article Published/Sorted/Amended on Scopulus 2011-08-04 14:25:12 in Tax Articles

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