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HMRC internal manual

Oils Technical Manual

Introduction and overview of oils activity: Contaminated, waste and recovered oils: Duty-paid and duty un-paid 'waste' oils

The control of waste oils, or oils contaminated or accidentally mixed and their recovery, processing and disposal, is a complex area.

In November 2008, the UK’s derogation from the EU Directive that made ‘recycled’ oil taxable if put to a taxable end use, came to an end. Since then, unless it can be shown to our satisfaction that duty has been paid on some or all of a waste oil product (which may be a mix of products of various types from various sources), duty is due if it is subsequently put to a dutiable end use, such as heating or motor fuel.

Most commonly, recovered heavy oil is used as furnace fuel. For this use, it takes the same rate as fuel oil, but used waste oil has its own tax type on the HO10, which is 540. Duty-paid oils may generally be disposed of without any departmental interest, unless they are to be returned to duty-suspended premises, where they may attract additional duty or give rise instead to a credit, dependent upon how they are to be treated or processed.

Further information on contaminated, accidentally mixed and recovered oils can also be found in the Hydrocarbon Oil Duties Act 1979, Section 20, and in Notice 179 paragraph 11.8.