Reading, UK: From 1 April 2022 the removal of the red diesel rebate means distribution businesses will need to pay the full duty rate on diesel in their fridge units.
The tax change will cost operators up to £100m says Tom Southall, director of policy at the Cold Chain Federation writing in response to readers’ questions in Cold Chain News‘ February issue.
Those running cold storage, or manufacturing, must also ensure that machinery such as backup generators and processing plant comply with the new rules, he says.
“The government expects businesses to run down rebated fuel before 1 April 2022, although some exceptions apply for backup generators. Businesses with surplus red diesel in storage tanks will need to sell or give it to someone who is allowed to use it or to any registered dealer in Controlled Oil, or dispose of it via an approved waste oil recycling or disposal company. Records must be kept to show how and when the fuel was disposed of or sold. Businesses are not expected to flush out rebated fuel from storage tanks, or TRUs,” he says.
“HMRC acknowledges that due to requirements to maintain minimum fuel stock levels, white diesel may be put into and mixed with existing stocks of red diesel in a storage tank. If after 1 April 2022 HMRC finds traces of fuel markers in the fuel supply of a vehicle or machine which is not allowed to use it, you may be asked to provide evidence to show any rebated fuel was put in before the rules changed, and that you have been refilling with the correct fuel since the rules changed.”
“This is a big change for cold chain operators, which they must start preparing for now. Ultimately, this move could further accelerate the move towards alternatively powered TRUs,” Southall says.
For the full report see the February issue of Cold Chain News available as a PDF on this website.
