HM Revenue and Customs Brief 73/07
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Issued 13 December 2007
Duty treatment of mixtures of ultra low sulphur diesel and sulphur-free
diesel from 4 September 2007
The Government recently brought in a measure requiring oil suppliers to
supply sulphur-free diesel (SFD) to garage forecourts from 4 September 2007. The
Government recognises that there may be occasions when SFD and ultra low sulphur
diesel (ULSD) need to be mixed to guarantee the supply. Under current
legislation, although SFD and ULSD both have the same duty rate, currently 50.35
pence per litre (ppl), mixtures of the two fuels meet neither definition and are
therefore liable to the higher duty rate for heavy oil, currently 56.94 ppl.
To ensure that the higher duty rate does not act as a disincentive to the
industry to supply SFD, the Government announced that mixtures of SFD and ULSD
will be charged at the ULSD rate from 4 September 2007.
To bring this about, the fiscal definition of ULSD in the Hydrocarbon Oil
Duties Act 1979 will be amended in the Finance Act 2008 to take retrospective
effect from 4 September 2007. The provisions will remove the density and
distillation requirements from the ULSD definition so that mixtures of ULSD and
SFD will meet the ULSD definition.
In discharge of their responsibility for the exercise of sound management of
the duty, the Commissioners will not be collecting any additional duty on
mixtures of SFD and ULSD that would subsequently need to be repaid. Duty on
mixtures of ULSD and SFD is therefore payable at the ULSD rate from 4 September
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Article Published/Sorted/Amended on Scopulus 2007-12-13 12:49:40 in Tax Articles