Business tax – guidance

Fuel Duty

Find out if you need to pay Fuel Duty on the fuel you produce, import or use and the rate you need to pay.

Oil producers

Hydrocarbon (mineral) oil

You must account for Fuel Duty on oils stored on your premises when they leave your warehouse for use within the UK. There are particular circumstances when you don’t need to account for duty, such as if the fuel is moved to another approved warehouse or used for certain industrial purposes.

There are also other legal responsibilities you have for controlling your premises and the oils stored there.

Read more about the conditions you must fulfil as an oil producer.

Biofuel and other fuel substitutes

Biofuel and other fuel substitutes are liable for Fuel Duty when they’re:

  • used as a fuel for any engine, motor or other machinery
  • used as an additive or extender in fuel
  • blended with hydrocarbon oil

Biofuels and other fuel substitutes aren’t liable for Fuel Duty when they’re intended for other specific uses, such as heating fuel or any other non-motor fuel use.

Fuel Duty will be due if any of the following happen:

  • the fuel is sent out from registered premises
  • the fuel is used as motor fuel
  • the decision is made that the fuel will be used as a motor fuel (known as being ‘set aside’ as a motor fuel)

The Fuel Duty rate you’ll pay depends on the proposed or actual use of the fuel and the type of engine. For example, if a substitute or additive will be used as road fuel in a diesel engine, you’ll pay the rate for diesel for road use.

You’re also responsible for keeping certain records and accounts.

Find out more about producing and using biofuels and other fuel substitutes.

Importers of motor and heating fuels

If you’re importing hydrocarbon oils or biofuels into the UK, there are various ways to account for and make payment of Fuel Duty. This will depend on:

  • how often you’ll import it
  • whether it’s coming from inside or outside the European Union (EU)
  • whether duty has already been paid in another EU country

Producers and warehousekeepers

If you follow certain import procedures, you can bring dutiable fuel into the UK and keep it at your premises in duty suspension if you’re:

  • a motor or heating fuel producer and authorised to warehouse imported oil received directly from a ship
  • an authorised excise warehousekeeper approved to import specified types of oil

Read about how to become approved to store motor and heating fuel products. Read about receiving, storing, and moving excise goods.

Occasional imports of fuel in duty suspension from other EU countries

If you only import fuel that is duty suspended from other EU countries occasionally, you can apply to HM Revenue and Customs (HMRC) to become a temporary registered consignee.

You must apply each time you import this type of fuel and follow the procedures for registered consignees.

You’ll also need to pay the duty to HMRC in advance.

Regular imports of fuel in duty suspension from other EU countries

You have 3 options:

  • apply for approval as a registered consignee
  • use a registered consignee who will act as your agent and import it for you
  • use an authorised warehousekeeper who receives fuel on your behalf into duty suspension in an excise warehouse approved to receive imports

Registered consignees aren’t allowed to store or dispatch goods in duty suspension. They must account for the Fuel Duty as soon as the goods are received.

Import duty-paid fuel from other EU countries

To import fuel into the UK commercially that’s been released for consumption (duty-paid) in another EU country, you can follow either of these procedures:

  • the standard scheme for unregistered commercial imports to import duty-paid goods into the UK and pay any UK duty in advance
  • become a registered commercial importer – if you’re approved, duty payments can be deferred

Read more on commercial importers and tax representatives - EU trade in duty paid excise goods.

Imports from countries outside the EU

If you import fuel from outside the EU, it’s liable for Fuel Duty when it reaches the UK.

You won’t need to pay it at that point if:

  • it’s delivered to an excise warehouse approved to hold imported oil, or to an approved oil producer’s premises
  • the duty is eligible for relief

Read more on import procedures for fuel producers and warehousekeepers.

Other duties and taxes

When you bring fuel into the UK from non-EU countries, you may need to follow the rules for payment of Customs Duty and VAT. This includes when it’s delivered to an excise warehouse or oil producer.

Read more about Customs Duty on oils and VAT on oil imports.

Exporting or despatching oils from the UK

You can ship oils from the UK without paying UK Fuel Duty, in certain circumstances, to:

  • the Isle of Man
  • other EU countries
  • outside the EU
  • ships’ stores

Find out about how to remove oil from duty-suspended warehousing.

Read more about duty free ships’ stores.

Dealers in controlled oils

If you’re approved as a Registered Dealer in Controlled Oils (RDCO), you only need to submit Fuel Duty returns if you deal in red diesel or marked rebated kerosene in bulk. The only exception is if you supply red diesel to commercial vessels. In these cases there are special provisions for sales to private pleasure craft.

You don’t need to make Fuel Duty returns if you:

  • are approved as an RDCO dealing only in aviation turbine fuel
  • only sell controlled oils in pre-packaged containers of 20 litres or less, even if you buy in bulk

Read more on completing returns as a Registered Dealer in Controlled Oils.

Pay Fuel Duty

When you’re registered with HMRC as a fuel producer, supplier, user or tax warehouse they will send you returns and let you know how to pay the Fuel Duty due.

Rates

In some cases, the rates below include any rebates given if certain mandatory requirements are met, for example marking and restrictions of use.

Fuel type Rate
Unleaded petrol £0.5795 per litre
Heavy oil (diesel) £0.5795 per litre
Biodiesel £0.5795 per litre
Bioethanol £0.5795 per litre
Aviation turbine fuel used for private pleasure flying £0.5795 per litre
Light oil (other than unleaded petrol or aviation gasoline) £0.6767 per litre
Aviation gasoline (Avgas) £0.3770 per litre
Light oil delivered to an approved person for use as a furnace fuel - includes rebates £0.1070 per litre
Marked gas oil - includes rebates £0.1114 per litre
Fuel oil - includes rebates £0.1070 per litre
Heavy oil other than fuel oil, gas oil or kerosene used as fuel £0.1070 per litre
Kerosene to be used as fuel in an engine, other than in a road vehicle or for heating - includes rebates £0.1114 per litre
Biodiesel for non-road use - includes rebates £0.1114 per litre
Biodiesel blended with gas oil for non-road use - includes rebates £0.1114 per litre
Road fuel natural gas, including biogas £0.2470 per kg
Road fuel gas other than natural gas – eg liquefied petroleum gas £0.3161 per kg

Fuel duty reliefs

You may be able to claim fuel duty reliefs if you use certain fuels or oils for specific purposes. For more details, read Fuel Duty reliefs.