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HMRC internal manual

Oils Technical Manual

Central accounting points: Details of those functions carried out by the trader at the CAP: Other duty credits

Various situations can arise after the delivery of product from a refinery or warehouse that can result in a change in duty liability, where a claim for a duty credit (i.e. a reduction in duty liability) may be made.

Notice 179 sets out the accounting procedures that traders should adhere to.

It is important to decide if the adjustment relates to an occurrence in the current period or from a past period.

There are some specific situations where duty adjustments need enquiry and authorisation by the refinery/warehouse officer.

For example:

Payments in excess of £20 million must be made by CHAPS (Clearing House Automated Payments System.

Payments up to and including £20 million are normally made by BACS direct debit but can be made by CHAPS

  • contaminated or accidentally mixed oil returned to a refinery or warehouse
  • commingled stock
  • duty paid additives or marker concentrates
  • waste oil
  • vapour recovery - this has been claimed under an ‘Extra Statutory Concession’ that has allowed duty credit on recovered vapour during duty paid deliveries that is returned as liquid into duty suspended storage. This is to be replaced by new regulations as soon as they can be put through the Parliamentary process - most likely around 2020.

Note: Due to the difficulty of actually measuring recovered product from the vapour recovery units, the oils industry uses an agreed formula to calculate the volumes each month. This will then appear as a duty credit either within the warehouse removals schedule or as a separate adjustment by the Central Accounting Point.

For further information on vapour recovery see the section on ‘Measurement’ HCOTEG170000 in this guidance.