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HMRC internal manual

Oils Technical Manual

Law - background: UK legislation

Primary legislation (Acts of Parliament)

A new Act is put before Parliament as a Bill, which is then subjected to a first reading, second reading, committee stage and more. It is only after having been to the House of Lords and back to the House of Commons, and then having been voted through and gained royal assent that it finally becomes law as an Act of Parliament.

In many cases an Act stands on its own by setting out the law as it applies to a particular matter without the need for further legislation. In other cases the Act instead empowers another person or persons to make additional legislation to give the primary legislation outlined in the Act full effect.

The Hydrocarbon Oil Duties Act 1979 is an example of an Act, which is a major piece of legislation, known as primary legislation.

Secondary legislation (Statutory Instruments)

Statutory Instruments (SI) usually comprise the detailed provision not contained in the primary legislation. However they can also be used to amend Acts. SIs are given a title, to indicate the scope of the legislation, and a reference number that includes the year in which they are made e.g., SI 2004/2065 is the ‘Biofuels and Other Fuel Substitutes (Payment of Excise Duties etc) Regulations 2004.

In the case of tax matters, SIs are only usually laid before the House of Commons and are subject to either a ‘negative’ or an ‘affirmative’ procedure. Under the ‘negative’ procedure the SI takes effect unless a resolution is passed nullifying it, whilst under the affirmation procedure it has to be approved by resolution before it can take effect.

Secondary legislation is only valid if it lies within the legislative powers conferred by its’ “vires”. That is a SI can only cover the precise areas delegated to this by primary legislation. If a SI goes further, it is said to be “ultra vires” (beyond powers).

Tertiary Legislation

If the primary legislation has a section written into it giving HMRC the power, we can also make conditions that have force of law by publishing them in a Notice. This is tertiary legislation.

The sections of notices which have the force of law, should be shown in bold and be contained within a box, e.g. parts of Notice 179E ‘Bio-fuels and other Fuel substitutes’ have the force of law because it contains directions made under powers conferred to HMRC by Regulation 6 of the Revenue Traders (Accounts and records) Regulations 1992 (SI 1992 No 3150).

Extra Statutory Concessions

Sometimes, the strict application of a law may put a burden on traders that was not originally intended or which could not have been foreseen. In order not to unfairly penalise traders, we may therefore allow an Extra Statutory Concession (ESC) in order to deal with any anomalies or to meet areas of genuine hardship which may exist, where amending the legislation concerned would be difficult or burdensome. ESCs are rarely used nowadays, and HMRC’s policy on them is to either legislate and continue giving effect to the ESC, or else to cease giving effect to it and remove it.

Notice 48

Details of all Extra Statutory Concessions are published in Notice 48, paragraph 6, which also lists the circumstances in which HMRC will give relief to traders outside of the law.