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HMRC internal manual

Biofuels and Fuel Substitutes Assurance

HM Revenue & Customs
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Accounting: Bioblend and bioethanol blend producers

Production in tax warehouse

Blending biodiesel or bioethanol with duty suspended oil to produce bioblend or bioethanol blend can only be done in a tax warehouse. Duty payment may be suspended provided the products are placed in the same tax warehouse as the oils they are being blended with.

Duty liability and payment

The excise duty due on these blends must be split between the two grades on the HO10and be shown against the appropriate tax types.

For example, in the case of bioblend, duty must be accounted for under tax type 589 for the biodiesel portion and 545 for the ULSD portion.

If any other type of heavy oil is used to make bioblend, that portion of the blend must be shown under the appropriate tax type.

Registered biofuels producers must be able to support the apportionment from their own production and blending records. The proportions are to be calculated and shown in the records to “the nearest 0.001%”.

Under the Hydrocarbon Oil Duties Act 1979, sections 6AB(5) and 6AE(5) we can charge the total volume of blends at the rate for the heavy oil used where we are not satisfied with the separately declared portions.

When a deferment account is not held, duty will need to be paid upon each delivery at thetime of release.