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HMRC internal manual

Oils Technical Manual

Deliveries from Warehouse: Removals to other installations under duty suspension: Oils for ships engaged on marine voyages

Relief generally

Heavy oil may be removed from warehouse for use free of excise duty as fuel for ships, hovercraft, or any moving vessel of any kind, including rigs, engaged on marine voyages. Private pleasure craft not hired out with a crew are excluded. The relief is explained in Notice 263 Marine Voyages Relief.

Entitlement to supply duty-free heavy oil as fuel under Marine Voyages Relief does not apply to any voyage, or part of a voyage, in inland waters, i.e. above the inland limits of a port (e.g. on inland canals, lochs, etc).

Heavy oil may be taken duty-free from a duty-suspended warehouse for direct delivery into the entitled vessel, or shipped duty-paid and repayment claimed. Light oil must be shipped duty-paid and repayment claimed.

Notice 263 contains further details.


There is no routine requirement for security for duty. However, we retain the discretionary power to impose a security requirement in exceptional cases where the revenue is identified as being significantly at risk, e.g. where there is a very poor compliance record or the business is known to be in financial difficulties.

Application for duty-free supply

Except for cases dealt with under ‘omnibus application’ (Below) application should be made on one copy of the delivery note, which should be specially endorsed by the trader with a rubber stamp or by overprinting, and which must bear the name of the ship (or hovercraft) and the place where it is lying.

The wording of the endorsement should be as follows:

“ I apply on behalf of the owners of the vessel …. [Name of vessel]…. Lying at ………. . for the delivery without payment of the excise duty of the heavy oil specified hereon. The oil should be delivered directly into the vessel, for use as fuel on board this vessel while engaged on a marine voyage. Customs permission must be obtained before diversion to alternative use.

Date ……….. ………….

[Master, Mate, Chief Engineer or other authorised person]”

Applications for ships undergoing trials may be made by the builder or other person responsible for carrying out the trial.

Before supplying oil duty-free, the warehouse-keeper must be satisfied that the ship is entitled to receive it.

Omnibus application

You may allow omnibus applications if particular ships owned or chartered by the applicant are regularly bunkered from the same installations and there is no increased revenue risk. (Paragraph 3.3 of Notice 263).

Certificates of receipt

The warehousekeeper should obtain a certificate of receipt, given by the master, mate or chief engineer on the copy of the delivery note that is used for the application, in accordance with the paragraph on ‘Application for duty-free supply’ (above). This copy of the delivery note should be retained by the warehousekeeper for production to the officer, if required. (Paragraph 3.1 of Notice 263).

Signatory to delivery notes

If it is impractical to obtain the signature of one of the specified ship’s officers, (e.g. in the case of certain trawlers or quick turn-around ships), the signature of a shore superintendent or a similar responsible individual may be accepted provided that person is clearly acting for the owners (or charterers) of the ships. No enquiries need be made on the point in the absence of suspicion.

In the case of ships undergoing trials the signature of the builder or other person responsible for carrying out the trials, or an authorised employee, should be accepted.

Bunkering by craft

The arrangement in HCOTEG92260 for bunkering foreign-going ships from craft may be applied to the supply of heavy oil for ships engaged on marine voyages.

Visits to operators of ships

Arrange for visits to be made occasionally to owners and operators of ships which receive heavy oil for use as marine voyages bunkers, especially those operating estuarial or harbour craft.

Confirm as far as possible that the oil is delivered direct to the entitled vessel for use on board and is not re-landed or placed in intermediate storage (e.g. shore tanks).

Refer customers to Notice 263 on our website.