Member Article

Changes to the rules relating to the use of red diesel will come into effect from April 1 2022 as a result of amendments to the Hydro Carbon Oil Duties Act 1979.

The new rules set out a list of “excepted machines” which are allowed to use red diesel.

A vehicle that is used for a purpose related to agriculture, aquatic farming, horticulture and forestry is allowed to use red diesel and can be used on the public road if the use is for one of those purposes.

A vehicle which is ordinarily kept in use for agriculture, aquatic farming, horticulture and forestry can use red diesel for any another purpose so long as it is being used on the land where it is ordinarily kept.

If you keep your tractor on your own farm, you can use it for whatever purpose you like and still be entitled to use red diesel, so long as it is also being used for agricultural purposes. And a vehicle that is used to cut trees, hedges and verges and to deal with frost, ice, snow and flooding is also allowed to use red diesel on the public road.

An agricultural vehicle is defined under the new rules as including tractors, off-road single seat vehicles which do not exceed 1,000kg, any vehicle exempt under DVLA (red diesel trucks etc.) in line with DVLA rules and any other vehicle with built in equipment used for agricultural, horticultural, piscicultural or forestry purposes.

Other specialist vehicles like diggers, cranes and forklifts can use red diesel if they are being used for purposes relating to agriculture, aquatic farming, horticulture and forestry.

Such special vehicles are entitled to use the public road to travel to and from the agricultural, aquatic farming or horticultural land.

Some specific examples of what is and isn’t allowed include harvesting crops and then transporting them to an AD plant. It is permitted to use red diesel for this purpose. However, you can’t use red diesel if you are simply collecting crops from someone else’s farm to transport to the AD plant. This is not use of the vehicle for agriculture and would be regarded as haulage for which you are not entitled to use red diesel.

Contractors are allowed to use red diesel if they are travelling to and from a farm to carry out agricultural work.

You are entitled to use red diesel in a tractor that is being used for gritting or clearing snow on public roads and there is no restriction of the location of where the work is being carried out. You are entitled to travel there and back on the public road using red diesel.

Participating in or running an agricultural show is regarded by HMRC as a purpose related to agriculture as is taking part in or organising a ploughing match. However, using an agricultural vehicle simply to travel to a show is not an agricultural use and you wouldn’t be able to use red diesel for that.

Taking part in local galas and fetes is allowed because it is promoting the farming industry as is pulling a float in a local gala. However, this would not extend to pulling the float if you were being paid for doing so. The use has to be something related to agriculture. Using a tractor and trailer simply to transport goods for third parties won’t fall within that definition and the use of red diesel isn’t permitted.

For more information, please contact Hamish Lean, Partner and Head of Rural Property, at [email protected], or your usual Shepherd and Wedderburn contact.

This article was first published in the Press and Journal.