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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.

Legislative changes

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 2007.

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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 Tax briefs are updated regularly and may be out of date at time of reading.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 2007-12-13 12:49:40 in Tax Articles

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