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HMRC internal manual

Oils Technical Manual

Deficiencies in Warehoused Oil: Losses due to accidents or thefts in duty suspension

Notice 179 paragraph 14.2 covers ‘What happens if oil is lost through accident or theft’.

The following is intended to give additional guidance to oils assurance staff when dealing with such losses.

Oil recovered following an incident

In the investigation of accidental losses any oil recovered as a result of the incident should be determined. The trader’s method of measuring any recovered oil should be ascertained and how the oil is to be disposed of. It may be disposed of to a waste oil contractor. If removed from the warehouse by a contractor there may be a liability to excise duty depending on the type of oil and further use it is put to.

Accidents in the course of delivery from a duty suspended installation

You can take official cognisance of losses in the course of, or subsequent to, delivery under duty suspension only in certain circumstances.

If the trader claims remission of duty on a loss arising from an accident in the course of any delivery (e.g. due to failure or incorrect setting of a pre-set meter, the overflow of a delivery vehicle or loss through a defective pipe line), you should require a written application giving the basis on which the quantity lost has been assessed.

If you are satisfied that the loss was caused by an accident as described above and as to the quantity lost, you may allow remission or credit of duty.

When considering claims, bear in mind that it is the warehouse-keeper’s responsibility to observe the safety regulations governing the handling of petroleum products, and to operate loading procedures designed to prevent accidents.

Large losses on road loading particularly those in excess of 2,000 litres are unlikely to occur unless loading procedures have been ignored. For this reason claims for large losses on road loading are to be rejected unless you are satisfied that the accident occurred despite every reasonable precaution.

A record of accidents in the course of delivery, and the action taken under this paragraph should be kept in the trader’s folder.

Accidents in a duty suspended installation

If the trader wishes the duty to be remitted on oil lost by accident in an installation, a written application must be made explaining the circumstances and stating the method by which the quantity lost was assessed.

If the trader’s explanation and the evidence are satisfactory you may allow the claim to remission of duty. Otherwise you should call for the duty on the deficiency.