Revenue and Customs Brief 37/07
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Issued 19 April 2007
Introduction of biofuels simplification
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.
- 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
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
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
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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Article Published/Sorted/Amended on Scopulus 2007-04-19 23:52:01 in Tax Articles