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HMRC internal manual

Oils Technical Manual

Repayment of Rebate Provisions: Introduction


Licence to use rebated fuel on the road

All vehicles must use fully duty paid fuel to run on public roads. If driven elsewhere (e.g. on private land), they may use rebated heavy oil (marked rebated gas oil or‘Red’ diesel, or marked rebated kerosene).

In very limited circumstances, rebated heavy oil can be used as a road fuel.

In order to use rebated heavy oil on the public road, a licence must first be obtained from HMRC, and then the rebate, i.e. the difference between the full rate of duty on thefuel and the rebated rate actually paid on the fuel used, must be paid.


The Hydrocarbon Oil (Payment of Rebate) Regulations 1996 provisions permit, inexceptional circumstances, the payment, by licensed users, of the rebate on rebated fuel, thus allowing the use of rebated fuel on the public road.

Public Notice 75

Public Notice 75 ‘Fuel for road vehicles’ provides information on those fuels which can be used legally for use on public roads, and on making an application for a licence for repaying rebate to enable rebated oil to be used.

Roles and Responsibilities – a simplified overview

Following the guidance given in this section:

The Excise Helpline provides information on making an application for a Licence to use rebated fuel on the public road to enquiries.

BT Ops Glasgow (from mid to late 2018, and prior to that) the Mineral Oils Reliefs Centre (MORC) in Newcastle is/was responsible for receiving and then processing applications for Licences to use rebated oils on the road,on payment of the rebate for both Large Businesses and SME’s.

Applications are to be made in writing in accordance with Public Notice 75.

On receipt, applications are forwarded by MORC (BT Ops Glasgow from mid-to late 2018) via the Regional Risk Teams to Oils Assurance Officers in Individuals and Small Business Compliance (ISBC) or for large businesses sent direct to the Large Business  (LB) Oil and Gas Sector team responsible.

LB or ISBC Oils Assurance Officers examine the application, consider whether a pre-authorisation visit is necessary, carry out the visit, and then decide whether a Licence should be granted or refused, and then make a recommendation to this effect to MORC (or BT Ops Glasgow, once the work has been transferred).

MORC / BT Ops Glasgow issue the Licence or send the applicant a refusal depending upon the recommendation made, notifying the Accounting Centre when the licence is issued.

On receipt of a notification that a licence has been issued, the Cumbernauld Accounting Team (CAT) notes their records, and then issues a set of HO72 and73 Return Forms to the applicant.

CAT later receives and processes the HO72 and HO73 Return Forms accounting for the paymentof the Rebate.

At the end of the accounting period CAT issues Form HO75, and Form HO74 on the eve of the Budget as may be required.

For full details of the procedures to be followed see HCOTEG122550,together with Table P at HCOTEG213755 and TableQ at HCOTEG213756.