Introduction and overview of oils activity: customs & excise duties and VAT
Certain oils liable to excise duty are also liable to an ad-valorem customs duty when imported from countries outside the EU. See also the section on ‘Imports’ within this guidance HCOTEG50000
(For further information on customs duty see Notice 171 - Hydrocarbon Oils: Customs Duty).
The current rates of excise duty are set out in the Tariff (Volume 1 paragraph 12.12).
Current and historic rates of excise duty can be found on our Internet site at .
This information may also be obtained by contacting our Helpline on 0300 200 3700.
The principal act relating to VAT liability is the Value Added Tax Act 1994 and extracts of this may be found within this guidance in the Section on VAT HCOTEG160000.
Receipts from other Member States which are of EU origin or of non-EU origin upon which customs duty has been paid, i.e. Community goods, are not imports for VAT purposes. Such goods are dealt with under the acquisition tax arrangements. Import VAT continues to be collected on oils from Third Countries.
The standard rate of VAT is usually chargeable on oils on which un-rebated rates of duty are to be paid.
Heavy oil which is marked or delivered under a marking waiver from approved remote marking premises (i.e. after removal from warehouse) and which is supplied in loads of 2,300 litres or less becomes entitled to excise duty rebate and at the same time the VAT liability changes from the standard rate to a reduced rate of 5%.
(More information on the reduced rate is available in VAT Notice 701/19 (Fuel and Power)).
Composite articles containing oils are chargeable with VAT according to the nature of the article whether or not the oil content is liable to duty.
Fuel substitutes and gas for use as road fuel are chargeable at the standard rate of VAT.
Directions concerning VAT on Oils are given within this guidance at HCOTEG160000 and in Notice 179 Section 15.