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HMRC internal manual

Oils Technical Manual

HM Revenue & Customs
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Deliveries from Warehouse: Duty-paid deliveries: Payment of duty

When payment is due

Duty must be paid on all oil before delivery from, or use in a duty-suspended installation, unless duty-free delivery is expressly authorised by law or the trader is approved to defer payment.

Notice 171 explains the position regarding payment of customs duty. However mineral oil may also be imported relieved of customs duty under various customs duty reliefs.

Customs duty reliefs

Inward Processing Relief

Notice 221 and the guidance given in IPR ‘Inward Processing Relief’ deals with customs duty relief by duty suspension or repayment.

End-use Relief

Notice 770 and the guidance given in ENU ‘Imported Goods End-use Relief’ deal with the importation of goods at a reduced or nil rate of customs duty, provided that the goods are put to a prescribed use.

Part 8 of ENU gives details of how End-use is applied to hydrocarbon oils in particular.

Tariff Quota and EC Import Preferences

If customs duty relief is claimed under an EU quota or Generalised System of Preferences (GSP), special ceiling arrangement separate entry on Form C88 will be made to the National Hub Entry Processing Centre in Salford who will forward acceptable claims to the warehouse officer to authorise customs duty-relieved delivery.

Directions for payment

  1. General

The directions to traders about payment of excise duty are given in Notice 179 Part 11.

  1. “ Sale or return deliveries”

For “sale or return” deliveries”, oil is chargeable with duty at the time when it is loaded into the conveying vehicle. No duty credit should be allowed on such oil returned to duty-suspended storage.

  1. Oil used in a duty-suspended installation

The duty on oil used should be paid and accounted for as on deliveries for home use. Oil used at producers’ premises, which does not qualify for duty-free use should be duty-paid.