Seeing red over diesel tax

Despite the CLA and others defending agriculture's favourable position on the taxation of red diesel and with wider capital tax reliefs, red diesel relief will be lost from April 2022 for the construction sector.

Mark Riches, CLA Director Midlands
Mark Riches, CLA Director Midlands

This will impact a surprising number of farmers. The construction industry’s current rebate will be lost as it is moved onto standard diesel, affecting those who undertake a combination of agricultural and non-agricultural work. Many are simply not ready.

We’re still pushing for clarity, but if you’re using the same vehicles or machinery for different work, it will probably require changing filters, tanks and cleaning fuel lines as it will remain illegal to have marked fuel in an ineligible vehicle. Fines and seizure are possibilities, though we understand officers will consider mitigating factors. Stringent record-keeping will be important for multi-purpose situations.

I’d suggest that farmers run their own business resilience check – and incorporate inflation, because if fuel costs multiply overnight, it will affect your ability to continue in the sector.

Mark Riches, CLA Director Midlands

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