Fuel duty

Fuel duty is a tax levied on road fuel, heating oils, biofuels and low-carbon fuel, both produced and imported into the UK. Fuel duty mainly impacts fuel importers and producers:

• Refineries
• Biofuel producers
• Substitute fuel producers

There are 16 fuel duty rates for different types of fuel and uses. The rates range from 7.2p per litre to 62.67p per litre. Any fuel intended to be used as road fuel or used outside of machinery in the sectors below must be taxed at the main fuel duty rate (currently 52.95p per litre).

The duty is paid by the owner of the fuel once it leaves the refinery, production site, or import terminal.

Reliefs and rebates are available for fuel and oil used in various industrial processes, electricity generation, and certain types of ”excepted machines” used for qualifying purposes:

• Oil used in industrial processes but not used in an engine, motor, machinery or heating fuel
• Fuel used to generate electricity in a power station, including combined heat and power stations
• Aviation turbine fuel, not including private pleasure flying
• Diesel and petrol used for sea voyages
• Diesel used by horticultural producers
• Fuel loaded onto a ship or aircraft for use as stores on a foreign voyage or flight

Rebated oils, such as red diesel and kerosene, are used by specified machines in a range of settings:

• Agriculture
• Golf courses and amateur sports clubs
• Heating and electricity generation in non-commercial premises
• Marine craft on inland waterways

Fuel duty legislation is complex, and it is easy to make mistakes. To make sure you are paying the right amount and at the right time, it is vital to have expert help.  

We can help:

• Understand your fuel duty obligations
• Assess whether you are using the right fuel and paying the right amount of tax
• Identify available reliefs or rebates
• Deal with any disputes with HMRC or counterparties, such as when using shared assets
• Apply for any required authorisations and approvals