Government to scrutinise red diesel use

Hidden in the Budget documentation was an announcement that the government is to investigate the use of red diesel.

A call for evidence of the use of red diesel will be made on 20 March.

This is to improve understanding of eligible industries and current use, in particular in urban areas, said the Treasury document.

Red diesel is taxed at 11.14p/litre while the rate for road diesel is 57.95p/litre.

See also: Dissecting red diesel rules

The NFU will be responding to the call for evidence, as will the National Association of Agricultural Contractors (NAAC).

“While the document highlights, in particular, a review of use in urban areas, the NAAC will keep a watching brief on agricultural use and will press for the continued use of red diesel in modern farming and horticulture,” said Jill Hewitt, technical consultant to the NAAC.

“The association does not condone the inappropriate use of red diesel, particularly if carrying out non-agricultural work or particularly haulage in preference to other more suitable heavy goods vehicles, which are not allowed to use rebated fuel.”

The NAAC would be pressing to retain the right that contractors could operate as “farmers without land” and must be allowed to work without discrimination, on a level playing field with farmers.

An estimated 91.5% of farmers use contractors and the NAAC was heavily involved in the last consultation on rebated fuel in 2005.