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Revenue and Customs Brief 37/07

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HM Revenue and Customs -Tax Authorities

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Issued 19 April 2007

Introduction of biofuels simplification

Revenue & Customs Brief 02/07 issued on 5 January 2007 invited views on proposals to reduce the burdens of the biofuels regime on non-commercial and medium-sized producers. Following this informal consultation as announced in the Budget, we can confirm that we will be introducing the proposed changes.

We proposed:

  • A de minimis production level of 2,500 litres per annum below which producers would not need to enter premises, submit returns or pay duty, and
  • Reducing the frequency of returns for all but the largest producers (defined as those producing over 450,000 litres per annum) from monthly to quarterly.

Consultation responses

We would like to thank those who took the time to respond. A large majority of responses were strongly in favour of the proposals. A minority of respondents suggested a higher threshold than the proposed 2,500 litres per annum, below which producers of biofuels (or other fuel substitutes) would not need to register or pay duty. We do not want to set the threshold so high that it gives some small commercial producers an advantage, through not needing to pay duty, over others. It is possible, however, to reduce unnecessary burdens on those producing for their own use and on those who may be testing small quantities prior to going into business. We will monitor the effectiveness of the 2,500 litre level and consider the scope for raising the threshold a year after its introduction.

There were no objections to the threshold of 450,000 litres per annum, above which producers will have to submit returns on a monthly basis, as now, rather than quarterly.

There were no objections to our proposals to show some flexibility towards those producers whose output fluctuates around the thresholds (lower and upper).

There were also no objections to penalties for abuse of the conditions.

What happens next?

We will advise you of the date of implementation of these changes in a later Brief. We estimate that they will come into effect during the summer. We remind biofuel producers that the current rules as set out in Public Notice 179E: ‘Biofuels and other fuel substitutes’ will continue to apply until the new regulations take effect.

We will also update Notice 179E. The current version may be seen on our website within the Leaflets and Booklets/Excise/Oils section.


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© Crown Copyright 2007.

A licence is need to reproduce this article and has been republished for educational / informational purposes only. Article reproduced by permission of HM Revenue & Customs under the terms of a Click-Use Licence. Tax briefs are updated regularly and may be out of date at time of reading.



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Article Published/Sorted/Amended on Scopulus 2007-04-19 23:52:01 in Tax Articles

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