Notice

Excise duty on gas for use as fuel in road vehicles (Excise Notice 76)

Updated 22 February 2024

1. Introduction

1.1 What this notice is about

This notice is about the excise duty charged on gas for use as road vehicle fuel, including:

• liquefied petroleum gas
• compressed natural gas
• liquefied natural gas

A road vehicle is a vehicle which is constructed or adapted for use on roads. Excepted machines, as described in Schedule 1A to The Hydrocarbon Oil Duties Act 1979, are not classified as road vehicles.

1.2 Who should read this notice

Suppliers, producers and users of gas for road fuel should read this notice.

1.3 Law covered in this notice

The UK laws covered in this notice are:

• Hydrocarbon Oil Duties Act 1979
• Customs and Excise Management Act 1979
• Finance Act 1994
• Finance Act 2004
• Commissioners for Revenue and Customs Act 2005
• Finance Act 2007 Sch. 24
• Finance Act 2008 Sch. 41
• Gas (Road Fuel) Regulations 1972 SI 1972/846
• Revenue Traders (Accounts and Records) Regulations 1992 SI 1992/3150

2. General

2.1 Gas duty rates

Road fuel gas is any substance which is:

• gaseous at a temperature of 15 degrees centigrade and under a pressure of 1013.25 millibars
• for use as fuel in road vehicles

There are 2 rates of duty for road fuel gases. The 2 rates are for:

• natural road fuel gas (including biogas) — road fuel gas with a methane content of at least 80%
• other road fuel gases — road fuel gas which contains less than 80% methane

The rates are set by the Chancellor and are charged per kilogram. The current rates of duty are shown in HMRC’s Integrated Tariff of the United Kingdom, Volume 1, Part 12. Contact the Excise helpline on: 0300 200 3700 for further information.

2.2 When the duty on gas is due

The duty is due when gas is sent out from the premises of the producer or dealer for use as fuel in a road vehicle, or when it’s:

• set aside for use as road fuel
• used as fuel for a road vehicle

Gas intended to be used or used as fuel for a road vehicle is known as ‘road fuel gas’.

‘Set aside’ takes place when it’s decided that the gas is to be used as a fuel for a road vehicle. For example, when it’s put into a container marked to show that its contents are intended for use as road fuel.

If a road vehicle carries gas powered equipment (for example, refrigerating apparatus or an exhaust gas purifier) the gas for such equipment is liable to duty if it’s drawn from or connected to the supply which is also used to propel the vehicle, even though such equipment does not contribute to the propulsion of the vehicle. Gas for use in such equipment is not liable to duty if it’s drawn from an independent supply.

Gas is not chargeable with excise duty if it’s used for heating or for industrial or scientific purposes.

Gas is either duty-free or duty-paid, regardless of its description or trade name.

2.3 If all your bulk stocks of gas are obtained duty-paid

2.3.1 Dealers and suppliers of road fuel gas

You must tell us so that we can be satisfied that the gas is duty-paid. You only need to keep records of purchases of gas, as long as you clearly mark your:

• storage containers — ‘FOR USE AS ROAD FUEL’
• delivery notes or sales invoices — ‘DUTY PAID GAS’ (see paragraph 4.1)

2.3.2 Users of gas-fuelled vehicles

You’re not required by law to tell us or to submit returns. However, it’s in your interest for you to:

• keep records (such as invoices) that demonstrate that the gas is duty-paid
• clearly mark storage containers ‘FOR USE AS ROAD FUEL’

In addition, our officer may require you to keep records for each vehicle, showing gas receipts and mileage run.

2.4 Vehicles that must always use duty-paid gas

Unless it’s an excepted machine you must always use duty-paid gas as fuel for that vehicle, if it’s:

• licensed under the Vehicle Excise and Registration Act 1994 for use on public roads, whether it is used on the public road or not
• an unlicensed vehicle undertaking a journey on the public road

A public road is a road which is maintained at public expense.

2.5 Vehicles that can use duty-free gas

Vehicles that are specifically excluded under Section 27(1) of the Hydrocarbon Oil Duties Act 1979 (HODA) from the legal definition of ‘road vehicle’ do not need to use duty-paid gas. This means any vehicle that is an excepted machine, as listed in Schedule 1A to HODA.

Unlicensed vehicles

Unlicensed vehicles do not need to use duty-paid gas providing they are not using the public road for any purpose.

A vehicle is ‘unlicensed’ if:

• you have submitted a  Statutory Off Road Notification (SORN)
• it became untaxed before 1 February 1998
• it’s an unregistered vehicle that has never used the public road

Agricultural vehicles

Agricultural vehicles do not need to use duty-paid gas providing they’re not using the public road for any purpose.

They also do not need to use duty-paid gas when they’re being used on public roads for:

• purposes relating to agriculture (including aquatic farming), horticulture or forestry
• cutting verges, hedges or trees that border public roads
• clearing or otherwise dealing with frost, ice, snow or flooding including when the vehicle is going to or from the place where it’s used for these purposes, and for collecting and returning the necessary equipment and materials

If you use your agricultural vehicle on the public road for a purpose not listed in the previous paragraph, you should pay the duty on the fuel used (as it would not be classed as an excepted machine). Payment should be made to Cumbernauld Accounting Centre using form C&E930A excise duty on gas for use as road fuel. Section 3 gives more information on how to pay the duty.

To be an ‘agricultural vehicle’, the vehicle must be one of the following:

• a tractor
• a single-seater vehicle of less than 1,000kg that is designed and constructed primarily for use off-road
• a vehicle only used for agricultural, horticultural or forestry purposes, that is licensed by the DVLA to use public roads only when passing between 2 areas of land occupied by the same person, and that distance is less than 1.5 kilometres by road
• a vehicle with permanently attached or built-in machinery used for handling or processing agricultural, horticultural, aquatic farming, forestry produce or materials — this category includes vehicles such as combined harvesters, crop sprayers, forage harvesters, pea viners, mobile seed cleaning machines and feed milling machines

Vehicles primarily designed for carrying goods, produce, and implements are trucks. They’re not agricultural vehicles even if the goods, produce, or implements being carried are for, or a result of, an agricultural activity.

Special vehicles

Special vehicles do not need to use duty-paid gas.

A special vehicle is a vehicle of any weight that is designed, constructed and used as mentioned in schedule 1 part IV to the Vehicle Excise and Registration Act 1994.

This covers such vehicles as:

• digging machines
• mobile cranes
• mobile pumping vehicles
• works trucks
• road rollers

Other than weight, it must meet the specifications of, and be used in accordance with the restrictions described in the relevant part of the Vehicle Excise and Registration Act 1994 to use duty-free gas.

For example, a digging machine, mobile crane or mobile pumping vehicle must not carry any load when used on public roads except that is necessary for its propulsion or operating the vehicle’s equipment.

If your use of your vehicle does not meet these conditions, you should pay the duty on the fuel used (as it would not be classed as an excepted machine). Payment should be made to Cumbernauld Accounting Centre using form C&E930A excise duty on gas for use as road fuel. Section 3 gives more information on how to pay the duty.

2.6 Storing duty-free gas and duty-paid gas separately

We do not normally allow duty-paid gas to be stored in the same container as duty-free gas. If you wish to make deliveries, or to hold stocks, for both dutiable and non-dutiable uses you must either:

• maintain separate stocks
• account for duty at the time of drawing gas for use as fuel for vehicles from stock on which duty has not previously been paid

2.7 VAT payable on gas

VAT is payable at the standard rate on gas for use as fuel for road vehicles when a taxable person supplies it in the course of business. It’s calculated on the duty inclusive value.

VAT is also payable on supplies of duty-free gas. The rate of VAT will depend on the purpose for which the gas is being supplied.

Read Notice 700: the VAT guide for more information.

3. Registration and payment

3.1 How to register

You must register online at least 7 days before you intend to send out, set aside, or supply gas for use in a road vehicle.

After you register, we’ll send you a registration number to use in all returns and correspondence in connection with the supply or use of gas as a fuel for road vehicles.

If any of your registration details change, you should tell us within 7 days of the change.

If you fail to notify us promptly of any change you may be liable to a financial penalty (see section 5.1: Prohibitions and penalties).

3.1.1 Tell HMRC about your site or premises

To complete your registration, you must provide information about each of your sites or premises to HMRC using form C&E930B.

3.2 Returns and duty payment

Use form C&E930A to submit a return quarterly or each month. You must show the total dutiable quantity of gas supplied, sent out or set aside in the previous period.

You must send payment of the full amount of duty with the form, no later than the 15th day of the month after the end of the period covered by the return. If you do not supply, send out or set aside any gas, you should still send a nil return.

You can approve a payment through your online bank account by following the instructions for Pay duty on biofuels or gas for road use.

If you pay by Bacs (Bankers Automated Clearing System) or CHAPS (Clearing House Automated System) you should use the following bank details:

HMRC General BT Receipts account:
Sort code	20-05-17
Account Number	40204374
BIC	BARCGB22
IBAN	GB86BARC20051740204374

If you pay by cheque, send it to:

HMRC Direct
BX5 5BD

Make your cheque payable to ‘HM Revenue and Customs only’ followed by your gas as road fuel registration number.

A separate form C&E930A should be completed for each accounting period in which you:

• send out gas for use as fuel in road vehicles
• set aside gas for use as fuel in road vehicles
• supply gas for use as fuel in road vehicles

3.3 If you fail to send your return or account for the correct amount of duty payable

The amount of duty due will be assessed and you’ll be notified. You may also be liable to a civil penalty.

If you fail to account for the correct amount of duty and the error is later discovered by one of our officers, you’ll be assessed for the amount of duty under-declared and may be liable to a civil penalty. See section 5 for further details.

3.4 How you should measure the gas

To calculate the duty payable you must measure the gas by mass (per kilogram). If you record gas by volume or cubic metre you should calculate the dutiable quantity using the conversion factors which have been agreed with the relevant trade associations or suppliers:

• liquefied petroleum gas:
  • 1 kilogram = 2 litres
  • 1 litre = 0.5 kilograms
• compressed natural gas:
  • 1 kilogram = 3.9 litres
  • 1 cubic metre = 256.198 kilograms
• liquefied natural gas:
  • 1 kilogram = 1.689 litres
  • 1 litre = 0.592 kilograms

4. Records

4.1 What records you must keep

As a producer, dealer or supplier of gas for use as fuel for road vehicles you must keep records of:

• each receipt
• setting aside (see paragraph 2.2)
• delivery of gas for use as fuel for road vehicles

This is to show that excise duty has been or will be paid.

The records should normally include:

Type	Records
For receipts	the supplier’s name and address and the address of the supplying depot if different the date of receipt the quantity and trade description of the gas whether the gas is duty-paid or not the identification of the containers it goes into
For setting aside	the date of setting aside the quantity and trade description of the gas the identification of the containers it goes into
For deliveries	the date of delivery the quantity and trade description of the gas the name and address of the customer (if known) and the vehicle’s registration mark if gas is supplied direct to a vehicle as fuel

If all gas set aside for use as fuel for road vehicles or received duty-paid is stored in containers marked ‘FOR USE AS ROAD FUEL’, you only need to keep records of all gas set aside or bought. However, you must advise customers that duty has been or will be paid. You can print, stamp or write this on the delivery note or invoice.

If you supply gas directly into vehicle fuel tanks, all you need do is display a notice on the apparatus delivering the gas, stating that it is duty-paid.

We do not usually need extra or separate records for our use, as long as your existing records contain all the details we need.

If you intend to prepare and keep records on a computer, you should follow the guidance in Notice 206 Revenue Trader’s Records. You do not need our approval before using a computer for revenue accounting of road fuel gas.

Notice 206: Revenue Trader’s Records explains further details of the general records you need to keep.

4.2 What records you must keep if you use gas obtained duty-free and subsequently set it aside for use as road fuel

You should keep the records explained in paragraph 4.1.

4.3 How long you need to keep your records

You must keep your records for 6 years unless, after making a written application, you have been allowed by HMRC to keep and preserve the relevant records for a shorter period. You should usually hold them at the premises where the gas is stored or the vehicles kept.

5. The law

5.1 Prohibitions and penalties

Prohibitions	You may be liable to:
If you misuse or supply duty-free gas for use in a ‘road vehicle’.	Civil penalties under either Section 9 of the Finance Act 1994 or an excise wrongdoing penalty under Sch 41 of the Finance Act 2008. Your vehicle may be detained, seized and forfeited.
If you fail to notify HMRC that you intend to send out, set aside or supply gas.	A Failure to Notify penalty under Sch 41 of the Finance Act 2008.
If you render a return that is incorrect or incomplete.	An inaccuracy penalty under Sch 24 of the Finance Act 2007.
If you fail to pay an assessment or the duty declared on a return.	A civil penalty of 5% of the unpaid duty or £250 whichever is the greater. If this penalty is issued and the duty remains unpaid a further penalty of £20 per day may be imposed until the duty is paid.
If you obstruct, hinder, molest or assault an officer of HMRC in the course of his or her duty.	An fine or imprisonment of up to 2 years or both.

5.1.1 Infringements

You may receive a civil penalty of £250 if you do not:

• make the records described in paragraph 4.1
• keep your records for 6 years (or the period HMRC has told you to keep them)
• render your return — an additional £20 penalty may apply for each day you do not render your return
• allow HMRC to inspect or examine premises, vehicles or stock

Additionally, your gas and vehicle may be seized and forfeited.

If your conduct involves dishonesty, we may:

• impose a penalty of up to 100% of the duty evaded
• take criminal action — this could lead to an unlimited fine or up to 7 years imprisonment

5.2 What powers our officers have

The law gives our officers powers to:

• enter and inspect any premises at any reasonable time, other than a private dwelling house, examine any gas and require the occupier to give such help as may be necessary for that purpose
• examine any road vehicle constructed or adapted to use gas as fuel for propelling it at any time

The law requires you to provide information relating to the supply or use of gas, including the production of stock records and any other documents if you:

• are concerned with the supply or use of gas
• are concerned with producing or dealing in gas
• own, possess, or for the time being are in charge of a road vehicle built or adapted to use gas as fuel for propelling it

5.3 How you can avoid a penalty

You can avoid a penalty by making sure you:

• do not use gas on which duty has not been paid in a road vehicle
• do not handle (acquire, store or sell) gas on which excise duty has not been paid, with the intention of it being used in a road vehicle
• tell HMRC of your intention to supply gas for use in a road vehicle and follow the correct record keeping and reporting procedures

Tell us as soon as possible if you’re aware that you have made a mistake. We may be able to reduce the penalty.

You have the right to appeal.

5.4 Using duty-free gas in a road vehicle

This is a breach of the road fuel laws.

Both the gas concerned and your vehicle may be detained, seized and forfeited. The vehicle will normally be returned to you for a sum of money. This amount may be based on the:

• penalties due for the road fuel offence committed (£250 for each offence)
• duty under-declared

If the infringement is considered serious, your vehicle and any gas is liable to be detained, seized and forfeited (and may not be returned to you). You may also face a heavy fine or imprisonment.

In serious cases you may have committed a criminal offence and may face a heavy fine or imprisonment.

5.5 If you disagree with an HMRC decision

The Finance Act 1994 contains the appeal and review process for Excise decisions. It provides for procedures for challenging the following:

• the terms offered for the return of a vehicle, engine or gas we have seized
• our refusal to return any vehicle (or engine) we have seized
• the imposition of a civil penalty or civil evasion penalty
• our assessment of excise duty payable

The procedures are different depending on what decision or decisions you’re challenging. We will tell you what your rights are, when we issue the decision letter.

5.5.1 Challenging return decisions and linked decisions

You may request a formal review by HMRC if you’re challenging:

• the terms offered for the return of a vehicle (or engine) we have seized
• our refusal to return any vehicle (or engine) we have seized
• the imposition of a civil penalty or civil evasion penalty
• the assessment

Your request should set out the reasons for your disagreement and must be submitted in writing to us within 45 days of our original written decision. If you disagree with the review decision you may appeal to the independent tribunal.

Read what to do if you disagree with a Customs decision about the return of seized goods for more information about challenging a HMRC decision.

5.5.2 Challenging penalty decisions and assessments

You may either accept the review offer or appeal to the independent tribunal if you disagree with a HMRC decision and you’re only challenging:

• the imposition of a civil penalty or civil evasion penalty
• the assessment

If you accept the review offer, but do not agree with the review conclusion, you will still be able to appeal to the independent tribunal. Read what to do if you do not agree with an HMRC decision — indirect tax for more information on HMRC’s review and appeal procedures.

5.6 Appeal against the seizure of your vehicle

The arrangements for challenging the actual seizure of goods liable for forfeiture (rather than HMRC’s decision about whether or not to return them to you) are different to the arrangements outlined at paragraph 5.5.

In such cases, if you disagree with our decision to seize your vehicle (or engine) you can appeal in writing to your local officer within one month of the date of seizure. We must then bring civil (‘condemnation’) proceedings in the courts to determine the matter, and you can challenge the seizure and forfeiture there.

More information on how to challenge the seizure of goods by HMRC can be found in Notice 12A: what you can do if things are seized.

Your rights and obligations

Read the HMRC Charter to find out what you can expect from us and what we expect from you.

Help us improve this notice

If you have any feedback about this notice, write to:

HM Revenue and Customs
Excise Fuel Duty Policy
4th Floor East
Trinity Bridge House
2 Dearmans Place
Salford
M3 5BS

Email: oils.policymail@hmrc.gov.uk

This address is not for general enquiries.

You’ll need to include the full title of this notice. Do not include any personal or financial information like your VAT number.

If you need general help with this notice or have another question, contact the HMRC Excise Helpline on 0300 200 3700 or email the Mineral Oil Reliefs Centre at morc.exciseenquiries@hmrc.gov.uk.

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If you’re unhappy with HMRC’s service, contact the person or office you’ve been dealing with and they’ll try to put things right.

If you’re still unhappy, find out how to complain to HMRC.

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