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HMRC internal manual

Hydrocarbon Oils Strategy

Tied Oils: Tied Oil credibility checks

During examination of the records, look at the credibility of the declared trade and the customers:

General

Has the trader disposed of any oil outside the scheme?

  • How do they dispose of waste products and oils?
  • Is there a duty liability as a result of the disposals?
  • Examine stock, sales and purchases records to look for disposals of waste product. Waste oils can be disposed through all three records depending on how contaminated it is.

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Distributors

  • Do the records of purchases and sales reflect the declared activities?
  • Inspect sales records and select some transactions to check that the customers are properly approved under the scheme, and that the trader is meeting their duty of care obligation in respect of the supplies.
  • Inspect delivery notes for unusual delivery addresses or instructions for drivers. Report to RIS any supplies where you consider there is possible misuse by the customer. The information should be reported and acted upon in accordance with the EX452 & Intelligence Report (IR) procedures (see Note below). Look for cash sales and yard sales where the customer collects the oil. These are an identified area of risk within the scheme. What records are maintained for these sales? Has the trader undertaken the expected checks, and recorded the results?
  • Are the correct documents held to substantiate intra EU disposals and exports?
  • Examine records of deliveries for any deliveries to Remote Marking Premises for oils to be marked for delivery as rebated fuels. Ensure that the duty on any such deliveries is accounted for by the trader.
  • Examine a sample of the delivery notes and/or sales invoices. On one of these documents should be the statement ‘THIS OIL HAS NOT BORNE EXCISE DUTY AND MUST NOT BE USED AS HEATING FUEL, MOTOR FUEL OR ADDITIVE OR EXTENDER TO MOTOR FUEL’.
  • If the trader is not required to submit returns, is the trading level still below 10,000 litres per annum?

Note: Please access the referral form (Excel 279kb) and return reminder (Word 26kb).

Please also access the IR form and guidance for completion in the FIS Manual.

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Users

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