Fuel Duty: reliefs
Check if your use of oils for an industrial purpose means you do not have to pay Fuel Duty or you’re entitled to a repayment.
Overview
You may be able to claim relief from or a repayment of Fuel Duty if you:
- use certain fuels or oils for specific purposes
- export fuels and oils for use outside the UK
Tied oils: oils not used for fuel
You may not have to pay Fuel Duty if the oil is not used for:
- fuel in an engine, motor or other machinery
- adding to fuel in an engine, motor or other machinery
- heating
Oils for uses other than those listed above are ‘tied oils’, and include:
- light oils
- heavy oils (gas oil, fuel oil or kerosene)
To receive tied oils free of duty or receive repayments of duty, you must get HMRC approval. This applies whether you’re using or distributing them.
To get approval, complete form HO27 and return it to HMRC.
Read get relief for mineral oil put to certain uses (Excise Notice 184A) for information about tied oils free of duty.
Fuel used to generate electricity
If you use fuel to produce electricity, in a generating station or in a combined heat and power station, you will not need to pay duty.
You can apply for a repayment of any duty you’ve already paid after the fuel has been used to produce electricity.
Read more about heating fuels used to generate electricity.
Aviation turbine fuel
You do not have to pay Fuel Duty on aviation turbine fuel you use for aircraft fuel, as long as:
- you’re not using it for private pleasure flying
- all the other necessary conditions are fulfilled
Read about duty on fuel for private pleasure flying.
Marine voyages
You can claim relief on heavy oils (diesel) or light oils (petrol) that you use during a sea voyage as long as:
- the vessel is not a private pleasure craft
- during the voyage you’re either within the limits of a port or at sea at all times and not on any inland waterway
To claim relief complete form HO50 and send this back to HMRC.
Read more about relief for marine voyages.
Horticultural producer’s relief
If you’re a horticultural producer you can claim repayment of the duty on heavy mineral (hydrocarbon) oil used for eligible purposes.
Read more about claiming horticultural producer’s relief.
Rural Fuel Duty relief
You can claim Rural Fuel Duty relief if you’re a retailer selling unleaded petrol or diesel as road fuel in the:
- Inner and Outer Hebrides
- Northern Isles
- Islands of the Clyde
- Isles of Scilly
You can claim relief of 5 pence per litre on petrol and diesel you buy for onward retail sale.
You must register to claim rural fuel duty relief using form HO80, and then complete and return form HO81 to HMRC.
Claim drawback
You may be able to get reimbursement of Fuel Duty if your goods are:
- loaded into a ship, or aircraft, for use as stores on a foreign voyage or flight
- placed in a tax warehouse for use as ships’ or aircraft stores
Read more about using the drawback scheme.
Read about claiming drawback on ships and aircraft stores.
Rebated oils
If you’re a fuel producer or distributor, you may be able to pay lower rates of duty on rebated oils (known as controlled oils) such as red diesel and marked kerosene. These oils are not to be used as road fuels.
To pay lower rates, you’ll need to be approved by HMRC as a Registered Dealer in Controlled Oils (RDCO). As an RDCO you’ll have additional responsibilities, including:
- marking them, or having them marked — read motor and heating fuels general information and accounting for excise duty and VAT (Excise Notice 179)
- restrictions on who you supply them to
- the type and quantity you supply
- taking sensible and reasonable steps to prevent criminals gaining them
- keeping detailed records
- providing regular returns to HMRC about the fuel you supply
Last updated 23 May 2023 + show all updates
-
Information about delays in processing Fuel Duty relief claims of up to 3 months has been added.
-
First published.