Hydrocarbon Oil Duties Act 1979

The dutiable commodities

Hydrocarbon oil

1

• (1) The following provisions define the various descriptions of oil referred to in this Act.

• (2) “Hydrocarbon oil” means petroleum oil, coal tar, and oil produced from coal, shale, peat or any other bituminous substance, and all liquid hydrocarbons, but does not include such hydrocarbons or bituminous or asphaltic substances as are—

• (a) solid or semi-solid at a temperature of 15°C or

• (b) gaseous at a temperature of 15°C and under a pressure of 1013·25 millibars.

• (3) “Light oil” means hydrocarbon oil—

• (a) of which not less that 90 per cent. by volume distils at a temperature not exceeding 210°C or

• (b) which gives off an inflammable vapour at a temperature of less than 23°C when tested in the manner prescribed by the Acts relating to petroleum.

• (3A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3C) “Unleaded petrol” means petrol that contains not more than 0.013 grams of lead per litre of petrol ... .

• (3D) “Aviation gasoline” means light oil which—

• (a) is specially produced as fuel for aircraft,

• (b) at 37.8°C, has a Reid Vapour Pressure of not less than 38kPa and not more than 49kPa, and

• (c) is delivered for use solely as fuel for aircraft.

• (4) “Heavy oil” means hydrocarbon oil other than light oil.

• (5) “Gas oil” means heavy oil of which not more than 50 per cent. by volume distils at a temperature not exceeding 240° C and of which more than 50 per cent. by volume distils at a temperature not exceeding 340°C.

• (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (8) “Kerosene” means heavy oil of which more than 50% by volume distils at a temperature of 240ºC or less.

Provisions supplementing s. 1

2

• (1) The method of testing oil for the purpose of ascertaining its classification in accordance with section 1 above shall, subject to subsection (3)(b) of that section, be such as the Commissioners may direct.

• (1A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) Subject to subsection (3) below, the Treasury may from time to time direct that, for the purposes of any duty of excise for the time being chargeable on hydrocarbon oil, any specified description of light oil shall be treated as being heavy oil.

• (3) The Treasury shall not give a direction under subsection (2) above in relation to any description of oil unless they are satisfied that the description is one which should, according to its use, be classed with heavy oil.

• (4) For the purposes of the Customs and Excise Acts 1979, the production of hydrocarbon oil includes—

• (a) the obtaining of one description of hydrocarbon oil from another description of hydrocarbon oil; and

• (b) the subjecting of hydrocarbon oil to any process of purification or blending,

as well as the obtaining of hydrocarbon oil from other substances or from any natural source.

• (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Hydrocarbon oil as ingredient of imported goods

3

Where imported goods contain hydrocarbon oil as a part or ingredient thereof, the oil shall be disregarded in the application to the goods of section 126 of the Management Act (charge of duty on manufactured or composite imported articles) unless in the opinion of the Commissioners the goods should, according to their use, be classed with hydrocarbon oil.

Petrol substitutes and power methylated spirits

4

• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Road fuel gas

5

• (1) In this Act “road fuel gas” means any substance which is gaseous at a temperature of 15°C and under a pressure of 1013·25 millibars, and which is for use as fuel in road vehicles.

• (2) In this Act “natural road fuel gas”is road fuel gas with a methane content of not less than 80%.

Charging provisions

Excise duty on hydrocarbon oil

6

• (1) There shall be charged on hydrocarbon oil—

• (a) imported into the United Kingdom; or

• (b) produced in the United Kingdom and delivered for home use from a refinery or from other premises used for the production of hydrocarbon oil or from any bonded storage for hydrocarbon oil, not being hydrocarbon oil chargeable with duty under paragraph (a) above, a duty of excise at the rates specified in subsection (1A) below.

• (1A) The rates are—

• (a) £0.5795 a litre in the case of unleaded petrol,

• (aa) £0.3820 a litre in the case of aviation gasoline,

• (b) £0.6767 a litre in the case of light oil other than unleaded petrol or aviation gasoline, and

• (c) £0.5795 a litre in the case of heavy oil.

• (2) Where imported hydrocarbon oil is removed to a refinery, the duty chargeable under subsection (1) above shall, instead of being charged at the time of the importation of that oil, be charged on the delivery of any goods from the refinery for home use and shall be the same as that which would be payable on the importation of like goods.

• (2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Excise duty on petrol substitutes and power methylated spirits

7

Excise duty on road fuel gas

8

• (1) A duty of excise shall be charged on road fuel gas which is sent out from the premises of a person producing or dealing in road fuel gas and on which the duty charged by this section has not been paid.

• (2) The like duty of excise shall be charged on the setting aside for use, or on the use, by any person, as fuel for a road vehicle, of road fuel gas on which the duty charged by this section has not been paid.

• (3) The rate of the duty under this section shall be—

• (a) in the case of natural road fuel gas, £0.2470 a kilogram, and

• (b) in any other case, £0.3161 a kilogram.

• (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Delivery of oil without payment of duty

Oil delivered for home use for certain industrial purposes

9

• (1) The Commissioners may permit hydrocarbon oil to be delivered for home use to an approved person, without payment of excise duty on the oil, where—

• (a) it is to be put by him to a use qualifying for relief under this section; or

• (b) it is to be supplied by him in the course of a trade of supplying oil for any such use.

• (2) the uses of hydrocarbon oil qualifying for relief under this section are all uses which do not consist in either—

• (a) the use of the oil as fuel for any engine, motor or other machinery; or

• (b) the use of the oil as heating fuel.

• (4) Where the Commissioners are authorised to give permission under subsection (1) above in the case of any oil, but the permission is for any reason not given, they shall, if satisfied that the oil has been put by an approved person to a use qualifying for relief under this section, repay to him the amount of the excise duty paid on the oil, less any rebate allowed in respect of the duty.

• (5) In this section—

• (a) “an approved person” means a person for the time being approved in accordance with regulations made for any of the purposes of subsection (1) or (4) above under section 24(1) below; . . .

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Restrictions on the use of duty-free oil

10

• (1) Except with the consent of the Commissioners, no oil in whose case delivery without payment of duty has been permitted under section 9 above shall—

• (a) be put to a use not qualifying for relief under that section; or

• (b) be acquired or taken into any vehicle, appliance or storage tank in order to be put to such a use.

• (2) In giving their consent for the purposes of subsection (1) above, the Commissioners may impose such conditions as they think fit.

• (3) Where any person—

• (a) uses or acquires oil in contravention of subsection (1) above; or

• (b) is liable for oil being taken into a vehicle, appliance or storage tank in contravention of that subsection,

his use or acquisition of the oil or, as the case may be, his becoming so liable shall attract a penalty under section 9 of the Finance Act 1994 (civil penalties); and the Commissioners may assess an amount equal to the excise duty on like oil at the rate in force at the time of the contravention as being excise duty due from him, and notify him or his representative accordingly.

• (4) Where any person supplies oil having reason to believe that it will be put to a use not qualifying for relief under section 9 above and that use without the consent of the Commissioners would contravene subsection (1) above his supplying the oil shall attract a penalty under section 9 of the Finance Act 1994 (civil penalties).

• (5) A person who, with the intent that the restrictions imposed by subsection (1) above should be contravened,—

• (a) uses or acquires oil in contravention of that subsection; or

• (b) supplies oil having reason to believe that it will be put to a use not qualifying for relief under section 9 above, being a use which, without the consent of the Commissioners, would contravene that subsection,

shall be guilty of an offence under this subsection.

• (6) A person who is liable for oil being taken into a vehicle, appliance or storage tank in contravention of subsection (1) above shall be guilty of an offence under this subsection where the oil was taken in with the intent by him that the restrictions imposed by that subsection should be contravened.

• (7) A person guilty of an offence under subsection (5) or (6) above shall be liable—

• (a) on summary conviction, to a penalty of £20,000 or of three times the value of the oil in question, whichever is the greater, or to imprisonment for a term not exceeding 6 months, or to both; or

• (b) on conviction on indictment, to a penalty of any amount or to imprisonment for a term not exceeding 14 years, or to both.

• (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (9) Any oil acquired, or taken into a vehicle, appliance or storage tank as mentioned in subsection (1) above, or supplied as mentioned in subsection (4) or (5) above, shall be liable to forfeiture.

Rebate of duty

Rebate on heavy oil

11

• (1) Subject to sections ... 12(1), 13ZA and 13AA(1), where heavy oil charged with the excise duty on hydrocarbon oil is delivered for home use, there shall be allowed on the oil at the time of delivery a rebate of duty at a rate—

• (a) in the case of fuel oil, of £0.1070 a litre less than the rate at which the duty is for the time being chargeable;

• (b) in the case of gas oil ... , of £0.1114 a litre less than the rate at which the duty is for the time being chargeable;

• (ba) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (c) in the case of heavy oil which is neither fuel oil nor gas oil, equal to the rate at which the duty is for the time being chargeable.

• (2) In this section—

• “fuel oil” means heavy oil which contains in solution an amount of asphaltenes of not less than 0·5 per cent. or which contains less than 0·5 per cent. but not less than 0·1 per cent. of asphaltenes and has a closed flash point not exceeding 150°C; . . .

• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) This subsection applies in any case where—

• (a) oil is delivered for home use,

• (b) regulations under section 24 below require, as a condition of allowing a rebate on the oil under subsection (1) above, that a marker prescribed by regulations under that section shall have been added to the oil, and

• (c) the marker is present at the time of delivery for home use but in such a proportion that its presence falls to be disregarded by virtue of provision made by regulations under that section.

• (4) In any case where subsection (3) above applies, a rebate may be allowed on the oil at the time it is delivered for home use if it appears to the Commissioners to be appropriate to allow it.

• (5) Where a rebate is allowed under subsection (4) above, the rate at which the rebate is allowed—

• (a) shall be such rate as appears to the Commissioners to be appropriate, but

• (b) shall not be less than 95 per cent. of, and shall not exceed, the rate of rebate specified in the relevant paragraph of subsection (1) above.

Rebate not allowed on fuel for road vehicles

12

• (1) If, on the delivery of heavy oil for home use, it is intended to use the oil as fuel other than for an excepted machine, a declaration shall be made to that effect in the entry for home use and thereupon no rebate under section 11 above shall be allowed in respect of that oil.

• (2) No heavy oil on whose delivery for home use rebate has been allowed (whether under section 11 above or section 13ZA or 13AA(1) below) shall—

• (a) be used as fuel other than for an excepted machine, or

• (b) be taken into any vehicle, vessel, machine or appliance, other than an excepted machine, as fuel,

unless an amount equal to the amount for the time being allowable in respect of rebate on like oil has been paid to the Commissioners in accordance with regulations made under section 24(1) below for the purposes of this section.

• (2A) But subsection (2) does not apply in relation to fuel used or taken in as mentioned in section 14E (private pleasure craft).

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Penalties for misuse of rebated heavy oil

13

• (1) Where any person—

• (a) uses heavy oil in contravention of section 12(2) above; or

• (b) is liable for heavy oil being taken into a vehicle, vessel, machine or appliance in contravention of that subsection,

his use of the oil or his becoming so liable (or, where his conduct includes both, each of them) shall attract a penalty under section 9 of the Finance Act 1994 (civil penalties). . .

• (1A) Where oil is used, or is taken into a vehicle, vessel, machine or appliance, in contravention of section 12(2) above, the Commissioners may—

• (a) assess an amount equal to the rebate on like oil at the rate in force at the time of the contravention as being excise duty due from any person who used the oil or was liable for the oil being taken into the vehicle, vessel, machine or appliance, and

• (b) notify him or his representative accordingly.

• (2) Where any person supplies heavy oil having reason to believe that it will be put to a particular use and that use would, if a payment under subsection (2) of section 12 above were not made in respect of the oil, contravene that subsection his supplying the oil shall attract a penalty under section 9 of the Finance Act 1994 (civil penalties)..

• (3) A person who, with the intent that the restrictions imposed by section 12 above should be contravened,—

• (a) uses heavy oil in contravention of subsection (2) of that section; or

• (b) supplies heavy oil having reason to believe that it will be put to a particular use, being a use which would, if a payment under that subsection were not made in respect of the oil, contravene that subsection,

shall be guilty of an offence under this subsection.

• (4) A person who is liable for heavy oil being taken into a vehicle, vessel, machine or appliance in contravention of subsection (2) of section 12 above shall be guilty of an offence under this subsection where the oil was taken in with the intent by him that the restrictions imposed by that section should be contravened.

• (5) A person guilty of an offence under subsection (3) or (4) above shall be liable—

• (a) on summary conviction, to a penalty of £20,000 or of three times the value of the oil in question, whichever is the greater, or to imprisonment for a term not exceeding 6 months, or to both; or

• (b) on conviction on indictment, to a penalty of any amount, or to imprisonment for a term not exceeding 14 years, or to both.

• (6) Any heavy oil—

• (a) taken into a vehicle, vessel, machine or appliance, other than an excepted machine, in contravention of section 12(2) above or supplied as mentioned in subsection (2) or (3) above; or

• (b) taken as fuel into a vehicle, vessel, machine or appliance at a time when it is an excepted machine and remaining in that vehicle, vessel, machine or appliance as part of its fuel supply at a later time when it ceases to be an excepted machine,

shall be liable to forfeiture.

• (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rebate on light oil for use as furnace fuel

14

• (1) On light oil charged with the excise duty on hydrocarbon oil, and delivered for home use as furnace fuel for burning in vaporised or atomised form by a person for the time being approved in accordance with regulations made for the purposes of this subsection under section 24(1) below, there shall be allowed at the time of delivery a rebate of duty at a rate of £0.1070 a litre less than the rate at which the duty is charged.

• (1A) No rebate shall be allowed under this section in respect of bioethanol blend.

• (2) Except with the consent of the Commissioners, no oil in whose case rebate has been allowed under this section shall—

• (a) be put to a use otherwise than as mentioned in subsection (1) above; or

• (b) be acquired or taken into any vehicle, appliance or storage tank in order to be put to such a use.

• (3) In giving their consent for the purposes of subsection (2) above, the Commissioners may impose such conditions as they think fit.