Explanatory note

These Regulations make provision relating to restriction on the use of rebated diesel and biofuels to specified categories of machines introduced by the Finance Act 2021 (c. 26) and the Finance Act 2022 (c. 3).

Part 1 provides for citation, commencement and interpretation.

Part 2 makes amendments to a number of statutory instruments consequential on the new restrictions on the use of rebated diesel and biofuels.

Regulation 2 amends the Hydrocarbon Oil Regulations 1973 (S.I. 1973/1311) to extend existing powers relating to the inspection, testing and sampling of oil, bioblend or bioethanol blend in or forming part of the fuel supply of any vehicle to any vehicle, vessel, machine or appliance.

Regulation 3 amends the Other Fuel Substitutes (Rates of Excise Duty etc) Order 1995 (S.I. 1995/2716) to extend provisions relating to determination of the appropriate rate of duty for fuel substitutes, additive and extenders to heating systems and to clarify that the rate of duty for a fuel substitute to be used in a diesel engine, or an engine, other than a piston engine, of an aircraft, is that specified by section 6 of the Hydrocarbon Oil Duties Act 1979 (c. 5) (“HODA”) for heavy oil minus the rate of rebate allowable under section 11.

Regulation 4 amends the Hydrocarbon Oil (Designated Markers) Regulations 1996 (S.I. 1996/1251) to provide for the designation of markers for the purposes of identifying fuel that is not to be used other than for an excepted machine (as defined by section 27 of HODA).

Regulation 5 amends the Hydrocarbon Oil (Payment of Rebates) Regulations 1996 (S.I. 1996/2313) to make provision for payments to HMRC, of amounts equal to any rebate, to be made for the purposes of section 12(2) of HODA in relation to a vehicle, vessel, machine or appliance that is not an excepted machine. This regulation makes further provision under sections 45 and 48 of the Taxation (Cross-border Trade) Act 2018 (c. 22) amending those regulations to provide for forms required for the purposes of repayment of rebates to be specified in a notice published by HMRC Commissioners.

Regulation 6 amends the Hydrocarbon Oil (Marking) Regulations 2002 (S.I. 2002/1773) to extend provision relating to labelling of delivery points for marked oil and particulars to be recorded on delivery notes to fuel not to be used other than for an excepted machine. Regulation 15 of the Hydrocarbon Oil (Marking) Regulations 2002 was made using section 2(2) of the European Communities Act 1972 (c. 68) and the amendment to that regulation is made using powers in section 45 of the Taxation (Cross-border Trade) Act 2018.

Regulation 7 amends the Biofuels and Other Fuel Substitutes (Payment of Excise Duties etc) Regulations 2004 (S.I. 2004/2065) to extend provisions relating to record keeping to fuel substitutes used in heating systems.

Regulation 8 amends the Hydrocarbon Oil Duties (Reliefs for Electricity Generation) Regulations 2005 (S.I. 2005/3320) to align the availability of relief with the changes to the availability of a rebate.

Part 3 makes transitional provision in connection with the coming into force of the restrictions.

Regulation 9 makes transitional provision in relation to forfeiture relating to changes of use to reflect the change in the legislation from excepted vehicles to excepted machines.

Regulation 10 makes transitional provision in relation to the continued use of rebated heavy oil or other marked oil that was taken into a vehicle, vessel, machine or appliance in the United Kingdom before 1st April 2022 where the taking in and use of the fuel was lawful prior to that date. Further provision is made in relation to use of rebated heavy oil or marked oil that is held by a person who obtained it before 11th June 2021 for use in stand-by power generation for critical equipment.

Regulation 11 makes transitional provision to secure the continued availability of relief in relation to fuel used for electricity generation where the fuel was obtained before 11th June 2021 by the person who used it or was obtained on or after that date and taken into a machine for use for electricity generation before 1st April 2022.

Any public notices referred to in these Regulations will be published at: https://www.gov.uk/government/collections/oils-notices. A person unable to access the notices electronically may access them in hard copy by post free of charge on application and otherwise by inspection free of charge at HMRC, 100 Parliament Street, London SW1A 2BQ (telephone: fuel duty enquiry line 0300 200 3700 or email: see https://www.gov.uk/government/organisations/hm-revenue-customs/contact/excise-enquiries).

A Tax Information and Impact Note covering this instrument was published alongside Finance Bill 2021-22 and is available on the website at https://www.gov.uk/government/collections/tax-information-and-impact-notes-tiins under the heading Autumn Budget 2021. It remains an accurate summary of the impacts that apply in relation to this instrument.