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HMRC internal manual

Hydrocarbon Oils Strategy

Tied Oils: assessments for losses and unauthorised supplies: unexplained losses

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

The legal audit trail containing the vires for assessment of losses is rather involved. It flows as follows:

1. HODA s.9 provides the legal basis for the Tied Oils scheme.



1. HODA s.24 enables the Commissioners to make regulations for the purposes of HODA s.9(1) i.e. the Hydrocarbon Oil (Industrial Relief) Regulations 2002 (SI 2002/1471).




1. Regulation 4 (c) of SI 2002/1471 provides that the Commissioners may approved Tied Oil traders subject to conditions.




1. Paragraph 5.5 of Notice 184A sets out the conditions of the scheme which include a requirement to account for any discrepancies that cannot be satisfactorily explained




1. HODA s.24(4B) imposes a duty liability as it provides the Commissioners may assess where there has been a failure to comply with any requirement ie failing to provide a satisfactory explanation for a discrepancy.




If a deficiency cannot be accounted for due to natural wastage, temperature variation, or tolerance in accounting (eg dipping tolerance) this is classed as an excess deficiency and the trader must account for and pay the deficiency at the appropriate duty rate. The above legal basis has been successful in a number of previous cases and should be quoted in any assessment letters to the trader.


Please refer to Appeals, Reviews and Tribunals Guidance (ARTG) for the content of letters containing reviewable decisions.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)