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HMRC internal manual

Oils Technical Manual

Receipts into Warehouse: Receipts from customers’ tank cleaning services: receipts of contaminated duty-paid oil from government departments

Contaminated duty-paid oil purchased by oil companies from government departments may be received into remote marking premises, or duty-suspended storage with possible credit of duty at the latter, subject to the conditions in Notice 179 part 5. Applications for duty credit must be accompanied by certificates from the appropriate government department containing the following information.

  • Details of the nature and amount of the contamination or, in the case of aviation fuels, confirmation that they have been off-loaded from aircraft tanks, or in storage for more than 6 months, or are otherwise off-specification (an ASD or laboratory report is not required for contaminated or off-specification MoD aviation fuels);
  • Where appropriate, particulars of the original purchase of the oil by the government department in sufficient detail to facilitate verification of duty payment;
  • Confirmation that any duty due on the contaminated oil has been accounted for to this Department in the usual way; that no claim for drawback has been, or will be made; and that the current rate of duty on the contaminated oil has been sold at a duty-inclusive selling price to the oil company.

Certificates from government departments as to duty payments, etc are to be provided at the time the oil is received by the oil company or, at latest within 6 months of receipt. At the expiry of 6 months any quantity of oil not covered by a satisfactory certificate is to be excluded from the authorised credit of duty.

If you are satisfied that the foregoing conditions have been complied with, you may authorise credit of duty to be taken based on the quantity of contaminated oil received. Credit of duty is not to be authorised for goods taken to Registered Remote Markers’ premises; it can only be allowed when marking takes place in a tax warehouse. See HCOTEG72000 ‘Duty Paid Oil returned to Remote Marking Premises’.

Special arrangements have been agreed by HMRC and MoD (Air) in respect of waste AVTUR removed from RAF stations. Local Compliance oils assurance teams have details of the arrangements.