The revision to the current duty means that many customers who currently use red diesel will no longer be eligible to receive tax relief. The greatest impact will be felt in the construction sector although other commercial activities will also be impacted.
With effect from 1st April 2022, businesses affected by these changes will need to order and use derv (also known as white diesel) rather than gas oil (red diesel) to comply with HMRC rules for permitted use.
Price
Gas Oil users currently only pay 11.14p per litre in duty in contrast to the 57.95 ppl for derv. This means switching to derv will increase the duty you have to pay by 46.81p per litre. Depending on how much you buy a year this could substantially increase your fuel bill and impact your available credit limits.
Compliance with HMRC rules
As you’ll be aware, the red dye in gas oil is added so that it remains in both pipework and fuel tanks. This could lead to authorities believing that anyone who is now using derv might have illegally used gas oil previously. However, HMRC has confirmed that customers who switch from gas oil to derv won’t be required to flush out their tanks, avoiding the high cost associated with flushing. We advise that you manage your stock of gas oil to run down to as close to zero on 31st March 2022 as is practically possible. As far as we are aware, HMRC will not be conducting physical checks at our customer's premises. However, they will look at paper records and ordering patterns to ensure those impacted by these changes managed their stock in such a way to achieve a clean switch to derv from 1st April. You should keep hold of any fuel invoices and avoid stockpiling.
For those customers who are able to run their stocks to zero a tank clean to remove excess dirt and sludge may be a good idea. We can recommend tank cleaning companies if this is of interest.
As we approach this deadline, our sales advisors will be happy to discuss your requirements leading up to 1st April to help manage this transition as smoothly and efficiently as possible.
Security
Those customers who will be storing larger quantities of white diesel should ensure that their premises are secure to mitigate the risk of theft. Tank monitoring or telemetry systems are also available to alert you to any unusual patterns of fuel movement.
Here at WCF Chandlers, we want to support our customers through this period of transition to ensure we achieve this deadline with minimal disruption to your business. Our trusted advisors will be happy to answer any questions you may have about these changes or if you would like to discuss tank telemetry, tank cleaning or greener fuels such as HVO. Simply contact us at commercialsales@wcfchandlers.co.uk
Here is a link to the Government website (“Gov UK – Reform of red diesel and other rebated fuels entitlement”) which sets out these changes in more detail: https://www.gov.uk/government/publications/reform-of-red-diesel-entitlements/reform-of-red-diesel-and-other-rebated-fuels-entitlement
With our domestic services to homeowners, bulk fuel solutions for farms and businesses, and local village buying groups with thousands of members across Lincolnshire, Nottinghamshire, Yorkshire, Norfolk, and the East Midlands, WCF Chandlers ensures you never run out of essential fuels.
Whether you need home heating oil, agricultural diesel, or commercial fuels, we've got you covered. Across all our depots, we are committed to providing you with exceptional value and exceeding expectations with our award-winning service. Whether you're looking for affordable heating oil for your boiler, or bulk fuel supplies for your farm or business, we have the right solution for you. We also offer local Village Buying Groups, allowing you to benefit from more competitive prices by grouping deliveries in your area. With thousands of members, our buying groups reduce distribution costs, and we pass those savings directly to you.
We can even manage your fuel levels with WCF Chandlers Tank Smart Monitoring service. Plus, if you want to spread the cost of your domestic heating oil, explore our helpful Payment Plans, where we can offer you the best available price.
