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HMRC internal manual

Oils Technical Manual

Receipt into Warehouse: Oil returned to Warehouse or Remote Marking Premises

Frustrated deliveries

Oil may be returned to premises which have duty-suspended storage because it could not be delivered at its intended destination, but there is no provision in law for credit of duty. Traders may choose to leave the product on the vehicle, without re-warehousing it, for subsequent re-delivery. The requirements of Notice 179 part 5 must be observed.

Un-used, contaminated and accidentally mixed oil

The Hydrocarbon Oil Duties Act 1979, sections 20 and 20A permit, subject to any conditions we make, the authorising of a credit of duty where duty-paid oils have become contaminated or accidentally mixed after delivery for home use and the oil is returned to duty-suspended storage.

Meaning of contamination

The term is not defined in law. Where the oil is not of merchantable quality it may be regarded as contaminated (See also Notice 179 part 5).

Credit of duty

In order to qualify for credit of duty, the contaminated or accidentally mixed product must be deposited in and treated at, duty-suspended premises.

Notice 179 sets out the procedure to be used by traders returning such product for treatment and gives information on the records which need to be kept.

Paragraph 5.8.4 deals with contaminated or accidentally-mixed oil returned to duty-suspended storage.

Paragraph 5.8.5 deals with contaminated or accidentally-mixed oils returned to remote marking premises.  No credit can be given unless any marking operation is carried out in a duty-suspended premises, such as an excise warehouse. There cannot be credits for contaminated fuel remarked and rebranded at a remote marking premises, because this is not a tax warehouse under EU or UK law.

You must ensure that marked oil is not treated in a way which removes the marker.

Interfaces received from duty-suspended or duty-paid interface tanks

Interfaces received from duty-suspended or duty-paid interface tanks

See HCOTEG72000.

Control at duty-suspended or remote marking premises

Before permitting discharge into storage you should consider:

  • The probable amount of credit involved
  • The revenue reputation of the trader
  • The incidence of returns
  • Whether there is any reason to suspect fraud; and
  • The acceptability of written evidence (e.g. delivery notes, records or returns, correspondence), which can be produced by the trader to support a claim of duty credit.

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Witnessing a return and sampling

If you decide to attend to witness a return, two representative samples of the returned product should be drawn by the trader in your presence before discharge to storage. This is unnecessary where you are satisfied as to the composition of the returned product and can immediately agree the amount of credit due, if appropriate.

If you decide not to witness a return, then there is no requirement for samples to be drawn.

Where samples are drawn

Where samples are drawn, one is to be retained by the trader and the other held by you, until the claim is finalised, at which time it is to be disposed of. If there is any reason to doubt that the nature or degree of contamination or accidental mixing is not as stated in the trader’s claim, you should require the trader to submit a sample for laboratory analysis: either an independent laboratory or the trader’s own laboratory may be used.

When the results of the test are known, and in light of any discussions or correspondence with the trader, if you are dissatisfied with the claimed details, you should submit the official sample to the LGC or any other appointed chemist, for analysis. This should rarely be necessary.

(For further information see the Section on ‘Sampling’ HCOTEG180000 in this guidance).

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

When you are satisfied as to the validity and amount of the claim, credit is to be allowed in accordance with HCOTEG72000. Credit cannot be given where contaminated fuel has been to returned anywhere other than to duty-suspended premises.