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HMRC internal manual

Gas for road fuel use

Law: Introduction

The duty was originally introduced on 3 July 1972, under provisions in the Finance Act 1971, section 3. Under HODA section 8 an excise duty of is applied to gas sent out or set aside as road fuel (see the HMRC website) and in Volume 1, Part 12 of the Customs and Excise Tariff for the current rate). For the purposes of the duty “gas” is defined as “any substance which is gaseous at a temperature of 15ºC and under a pressure of 1013.25 millibars and which is for use as fuel in road vehicles.” The power to make regulations relating to road fuel gas lies in the Hydrocarbon Oil Duties Act 1979 section 21. The sections of HODA particularly relevant to road fuel gas are:

  • section 5 which defines road fuel gas;
  • section 8 which provides for the charging of an excise duty on road fuel gas and specifies the rate of duty on any road fuel gas;
  • section 21 which provides for the making of regulations as specified in Part III of Schedule 3 to the Act; and
  • section 23 which deals with offences in connection with the use of road fuel gas.So far the power to make regulations for the purposes specified in Part III has been exercised only to the extent of making the regulations contained in the Gas (Road Fuel) Regulations 1972 which provide for:

  • the making of returns of duty by users and suppliers of road fuel gas(see paargraph 5);
  • restrictions on the mixing of duty-paid gas with other gas; and
  • the keeping and production of books, documents and records relating to road fuel gas and to vehicles using gas as a road fuel.The Regulations also give us power to enter commercial premises to examine road fuel and to examine road vehicles which use gas as road fuel.

Purpose and application of the law

The law provides the framework for the regime. Amongst other things it defines the scope of the regime, the trader’s obligations and HMRC’s powers.

There will be occasions when you will be faced with issues which are not precisely covered by these guidelines. In such cases you will need to consider whether or not a trader’s request or problem can be accommodated within the law.

When searching for a legal provision, or applying what appears to be a relevant provision, you will need to interpret the law. Always bear in mind that:

  • the law states what can or in some cases what cannot be done;
  • some legal provisions specify that, in particular circumstances, something is to be done, or a particular procedure is to be followed - these provisions leave no discretion;where the law appears to be silent on an issue it is likely that HMRC do not have the legal powers to permit it.

We expect that most problems will be resolved locally. However, issues which may affect policy or practices in other parts of the country should be referred to ESM Oils and the OilsUoE.