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HM Revenue and Customs Brief40/11

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HM Revenue and Customs -Tax Authorities

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Issued 9 December 2011

Excise Duty: Rural Fuel Duty relief scheme for road fuel on the Inner and Outer Hebrides, the Northern Isles, the Islands of the Clyde and the Isles of Scilly

Purpose of this Brief

This Brief gives information about a new Rural Fuel Duty relief scheme for retailers of road fuel on the Inner and Outer Hebrides, the Northern Isles, the Islands of the Clyde and the Isles of Scilly which is being introduced on 1 January 2012.

Retailers of road fuel within these areas will be eligible to register with HM Revenue & Customs (HMRC) to claim back five pence per litre (ppl) relief on unleaded petrol and diesel for retail sale within the eligible areas.

Who needs to read this?

Retailers of unleaded petrol and diesel sold as road fuel within the areas of the Inner and Outer Hebrides, the Northern Isles, the Islands of the Clyde and the Isles of Scilly.

Background

The price of fuel in the Scottish islands is around 10 ppl higher than the average for the rest of the UK. In the Scilly Isles it is even higher at around 25 ppl above the UK average.

The higher price of fuel on the islands is due mainly to the high cost of selling fuel in these regions. This is because of higher transport and distribution costs for delivering fuel to the islands and the low volume of fuel sold, meaning that fuel retailers' fixed costs need to be spread over a lower volume of sales.

The five ppl relief will provide some help to consumers in the areas concerned who are faced with high costs of petrol and diesel.

A Council Decision on 24 November 2011 allowed a derogation from the Energy Products Directive (2003/96) in order to introduce the scheme.

Who is eligible to claim relief?

You can claim relief if you are a retailer of road fuel (unleaded petrol and diesel) within the Inner and Outer Hebrides, the Northern Isles, the Islands of the Clyde and the Isles of Scilly.

You are not eligible to register if you purchase fuel in bulk, for example, for your own business use.

How does the relief scheme work?

If you are a retailer of road fuel within the areas concerned you can register with HMRC to claim five ppl relief on fuel you purchase on or after 1 January 2012 for onward retail sale in the Inner and Outer Hebrides, the Northern Isles, the Islands of the Clyde and the Isles of Scilly. You can make claims on a monthly basis.

You will have 60 days following your registration to reduce the cost of every litre of road fuel sold by the equivalent amount of the relief claimed. This is so that all consumers in the areas concerned benefit from the reduction in fuel duty.

The 60 day period during which retailers are not required to pass on the relief is designed to help avoid initial cash flow problems.

How do I register?

To register you need to complete form HO80: Registration to claim fuel duty relief (Scottish Islands and the Isles of Scilly), which is available on the HMRC website by following this link HO80. The form can be completed electronically but must be printed and returned by post to:

HM Revenue & Customs
Mineral Oils Relief Centre
BP4002
Benton Park View
Longbenton
Newcastle-upon-Tyne
NE981ZZ

You can also phone the Excise and Customs Helpline Tel 0845 010 9000 and ask them to send a form for you to complete and return.

A separate registration is needed for each retail premises.

HMRC will write to confirm that you are registered as a qualified claimant.

How do I claim the relief?

You need to register with HMRC to claim relief. HMRC will not accept a claim from any retailer who is not registered.

To claim the relief you need to complete form HO81: Claim for duty relief (Scottish Islands and Isles of Scilly), which will be available on the HMRC website in January 2012, in time for your first monthly claim. You will also be able to obtain a copy from the Excise and Customs Helpline Tel 0845 010 9000.

Claim periods will be based on a calendar month. You can only submit one claim per month.

HMRC will pay the relief claimed within 30 days of receiving the claim.

What information will be required on the claim form?

You will need to provide the following details of the fuel you have purchased and on which you are claiming relief:

  • the date of the purchase
  • the name of the supplier
  • period of claim
  • the reference of the purchase, such as invoice number
  • total volume in litres of unleaded petrol purchased in the period
  • total volume in litres of diesel purchased in the period
  • the amount of the claim

How is the relief calculated?

The amount you can claim is:

  • the volume in litres of unleaded petrol you purchased five pence = A
  • the volume in litres of diesel you purchased five pence = B

Add A and B together to work out the total amount of your claim.

What records must I keep?

You must keep evidence of all your purchases, such as invoices of road fuel on which your relief has been claimed. You will also need to keep your normal business records and produce them to HMRC if asked to do so.

Do I need to submit evidence for my relief claim with my return?

No. Please keep your documentary evidence as part of your records. HMRC will contact you if they wish to verify your claim.

How long will the relief scheme last?

The relief scheme is a pilot scheme which will be evaluated over a period of time to ensure that it is working effectively and that the price of fuel in the areas concerned has reduced.

This relief scheme is being implemented under the State Aid General Block Exemption Regulation No 800/2008.


About the Author

Crown Copyright 2011.

A licence is needed to reproduce this article and has been republished for educational / informational purposes only. Article reproduced by permission of HM Revenue & Customs.



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Article Published/Sorted/Amended on Scopulus 2011-12-10 13:45:25 in Tax Articles

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