Guidance

Check if you need to pay 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.

Overview

If you produce, import or use fuel you may need to pay Fuel Duty.

This guide explains the circumstances when you’ll be liable to pay.

Oil producers

Hydrocarbon (mineral) oil

You must account for duty on oils stored on your premises when they leave your warehouse for use within the UK. You’ll need to apply to defer payment of excise duty by registering to pay fuel duty. There are particular circumstances when you do not 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 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

You’ll need to register to pay duty on biofuel and other fuel substitutes if any of the following apply:

  • 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 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.

Biofuels and other fuel substitutes are not liable for duty when they’re intended for other specific uses, such as heating fuel or any other non-motor fuel use.

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 duty. This will depend on:

  • how often you’ll import it
  • whether it’s coming from countries inside or outside the EU
  • whether duty has already been paid in an EU country

Excise duty on gas for use as fuel in road vehicles

Excise duty may be charged on gas for use as fuel in road vehicles including:

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

You’ll need to register to pay for road fuel gas duty if the gas is:

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

You’ll also be responsible for keeping records, submitting returns and paying the duty due.

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

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:

Occasional imports of fuel in duty suspension from EU countries

If you only import fuel that is duty suspended from EU countries occasionally, you can apply to 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 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 are not allowed to store or dispatch goods in duty suspension. They must account for the duty as soon as the goods are received.

Import duty-paid fuel from EU countries

To import fuel into the UK commercially that’s been released for consumption (duty-paid) in an 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 duty when it reaches the UK.

You will not 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 dispatching oils from the UK

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

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

Read more about:

Dealers in controlled oils

If you’re approved as a Registered Dealer in Controlled Oils (RDCO), you only need to submit 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 do not need to make 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 RDCO.

Paying Fuel Duty

Fuel Duty (hydrocarbon (mineral) oil)

When you first register, HMRC will tell you when to file your returns and how to pay the duty. HMRC will then tell you how to do this annually.

Road fuel gas duty and biofuels and other fuel substitutes

When you’re registered, HMRC will send you a reminder to file your return and tell you how to pay the duty.

Rates

HMRC publishes rates and allowances for duty payable on light oils, heavy oils, biofuels and road fuel gases.

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.

Published 9 November 2009
Last updated 10 December 2019 + show all updates
  1. The guidance has been updated to reflect the new process for registering online if you have excise duty to pay on hydrocarbon (mineral) oil.

  2. The guidance has been updated to reflect the new process for registering online if you have excise duty to pay on biofuel and other fuel substitutes.

  3. The guidance has been updated to reflect the new process for registering online if you have excise duty to pay on gas for use as fuel in road vehicles.

  4. Aqua methanol added to rates table.

  5. First published.