HMRC increases penalties for illegal red diesel use

The Road Haulage Association (RHA) has welcomed HMRC's decision to increase the penalty for unlawful use of red diesel.

The changes - which began on 1 November - will mean that vehicles found to be illegally using rebated fuel will have to pay VAT and duty on the total fuel tank capacity- not the quantity of illegal fuel remaining, as the previous penalty charged.

The RHA is now urging HMRC to report unlawful use of rebated fuel, or ‘red diesel’, to the traffic commissioners.

RHA director of policy Jack Semple said: “We agree with the changes and welcome them.

“We have been pressing for the unlawful use of red diesel to be reported to the traffic commissioners so it can be regulated. It appears to be slow progress by HMRC.”

Under the previous penalties, the restoration fee was made up of £250 for unlawfully taking rebated fuel into a vehicle, a further £250 for using the rebated fuel illegally, duty and VAT on the amount of fuel found in the tank and, where the vehicle was seized, removal and storage costs.

Rebated fuel holds a lower rate of duty than road fuel and is illegal to use on public roads other than by excepted vehicles, such as agricultural and construction vehicles.