Red Diesel Tax Changes 2022

RED DIESEL TAX CHANGES 2022

Did you know that as of the 1st April 2022, the government going to be making substantive changes to taxation levels on red diesel (off-road diesel)?

From 1st April 2022, tax relief on red diesel will be removed for several industries, meaning businesses face large prince increases, and will have to source alternative fuel solutions.

However, there will remain many industries exempt from the tax changes. See below:

To remain exempt as of 1st April 2022:

Agriculture, horticulture, forestry, and fish farming
Non-commercial healthcare facilities (such as hospitals
Rail including passenger, freight, and maintenance
Non-commercial heating and electricity generation
Commercial boating
Off-grid power generation
Amateur sports clubs

No longer exempt as of 1st April 2022:

Construction
Waste management
Highways and road maintenance
Oil and gas extraction
Commercial heating
Airport operations and ports
Manufacturing
Logistics and haulage
Leisure
Mining and quarrying

WHY ARE THESE CHANGES BEING MADE?

Mostly to do with the environment and working with businesses to reduce their carbon footprint. Red diesel in its current form accounts for a large percentage (around 15-20%) of all diesel consumption across the United Kingdom, equating to approximately 14 million tonnes of Co2 every year.

The change in red diesel tax will require many industries to use fuel that’s taxed at the standard rate for white diesel and therefore encourages businesses to use alternative fuels to help reduce their environmental impact.

WHAT DOES THIS MEAN FOR YOUR BUSINESS?

One of two things, you either continue to use red diesel, meaning your day-to-day operations and costs will remain the same, or your business is has to conform to the new tax changes, meaning you’ll have to make some adjustments.

As of 1st April 2022, you must not purchase red diesel (or face seizure of vehicles and financial penalties) and instead sourcing an alternative fuel solution such as HVO or white diesel. Your business will also see large increases in cost, going from 11.14p per litre to upwards of 57p per litre.

WHAT ACTIONS DO I NEED TO TAKE?

Firstly, you need to source an alternative fuel solution. WB Power Services can help! We are experts in alternative fuel solutions such as HVO and utilise it heavily across our operations. We’ve assisted hundreds of companies prepare for the transition and reduce their carbon footprint.
Remove & recycle redundant fuels – Red diesel as of the 1st of April 2022 will need to be removed from your sites and recycled. We can facilitate this, working with several trusted third parties.

Tank clean if required – We can facilitate tank cleaning services, utilising our expert network of trusted third parties.

To find out more about our services relating to fuel solutions, HVO or anything similar, call our expert team today 0115 9444 422. We will work with you to make sure you’re ready for the 1st April 2022, and your business remains running at full operational capacity. Alternatively, use the below contact form to get in touch.