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Concern over the future for red diesel is set to be a hot topic at this month's LAMMA event at the Birmingham NEC. HMRC seeks to clarify red diesel rule changes

• Government pushes green fuel

• Farmers not so affected for now

• Goal is to tackle climate change

Concern over the future for red diesel is set to be a hot topic at this month’s LAMMA event at the Birmingham NEC.

A special session on both days of the two-day show (4-5 May) will discuss changes to rebated fuel rules with advice from HMRC representatives and experts from the National Association of Agricultural Contractors.

Entitlement for rebated – or red – diesel was withdrawn from various industries last month. The rule change is seen as part of the government’s drive towards the development of cleaner and greener alternatives.

The big change applies to vehicles used off-road. These vehicles are no longer be automatically entitled to use red diesel. Instead, use of the rebated fuel will be based entirely on what the vehicle is used for.

Cloudy issue.

Agriculture, horticulture, forestry and fisheries are among the industries which have retained the entitlement to use red diesel. But the fuel issue is complicated for farmers operating mixed-use businesses.

NAAC chief executive Jill Hewitt says farmers and contractors should consider two factors when working out if their business can use red diesel.

“The first is that any work you do is for an agricultural purpose. This is not necessarily the same as just doing work on agricultural land. The operation you are doing must be of benefit to the land or livestock.”

Farmers can also use rebated fuel in agricultural vehicles when cutting verges and hedges which border a road; clearing snow; gritting and assisting any clear-up following flooding, says Ms Hewitt.

Secondly, she addss, once a legitimate use has been established, it is important to then confirm the vehicle you are intending to use is also allowed to use red.

Climate emergency

Some industry commentators have suggested red diesel will eventually be phased out altogether. They include Priscilla Hall, who heads up the construction and green energy teams at national law firm Clarke Willmott.

Ms Hall said the rationale for changes to rebated fuel rules was understandable. The climate emergency needed to be addressed by a raft of initiatives and measures – including changes to the tax regime.

The construction industry in particular had been given time to prepare for change. But Ms Hall added: “The big question in my mind is while the agriculture and horticulture sector have not been affected, how long will this be the case.

“I can envisage significant challenges for the agricultural sector as margins are tight and practical and cost-effective alternatives such as electric or hydrogen tractors are not widely available if in the future restrictions are introduced.”

Speakers from HMRC’s fuel duty policy team and the NAAC will be on hand at LAMMA to bring farmers and contractors up to speed with the changes. They will lead the session at 1pm on both days of the event in one of two new speaker zones.

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