Red and white diesel and farming operations

Goweresque said:

The new rules on red and white diesel use come in soon, on the 1st of April. Obviously farming has still has a concession to use red. But to what extent will some machines/operations that take place on a farm require white from now on? Quite a lot of things that happen on a farm are not purely agricultural in nature. Quite a lot are of a construction/civil engineering type - digging ditches, repairing roads & tracks, laying concrete, preparing sites, erecting buildings, even fencing possibly.

So if a farm has machines like 360 excavators, backhoes and telehandlers, should they be operating on white if the work being done is not purely agricultural? For example, one can argue that combining a field is purely agricultural, in that you can never be doing it and it not be agricultural, harvesting is a fundamental part of food production. So a combine can always be on red. Whereas digging out ditches is not in and of itself agricultural. You could be digging ditches on a construction site and therefore need white. Equally fencing in and of itself is not always agricultural, fences are erected for all manner of purposes other than farming. So when these operations take place on a farm, are they agricultural ones or not? Do the machines need red or white? Does it make a difference if the farmer is doing the work himself, or is employing contractors? One assumes that if you have a new shed erected the contractor's equipment will need to be on white. So does the same apply to the farmer erecting his own shed? How far down the rabbit hole are HMRC going to go? Are we going to see HMRC turning up and dipping machinery and fining people based on what that machine was doing at that point in time rather than where it was (ie on a farm)?

Another point as ELMS increasingly kicks in is whether environmental work counts as farming? Does topping your wild bird cover count as farming, if no food is being produced? Or drilling it for that matter? After all by definition ELMS is paying for 'public goods' not food, so is it farming any more?

I guess my point is this - has any comprehensive definition of what constitutes 'agriculture' been provided with regards to the new rules? Or are we going to face massive uncertainty for the next decade or more as HMRC push the envelope of what is and what is not allowed?

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https://www.gov.uk/government/publi...pril-2022/check-when-rebated-fuel-can-be-used

https://www.gov.uk/guidance/fuels-for-use-in-vehicles-excise-notice-75#memorandum-of-agreement

there are long lists of definitions and links to more detailed lists etc.
Long and short if machines are used to complete work for a farm your covered which includes delivering produce of your farm to customers( with tractors), and maintaining your farm, which includes ditches, and tracks.

saying that with rising fuel prices we will soon be paying much more than we ever have for fuel, even when it’s red.

Goweresque said:

Where does the guidance say that? The Memorandum of Agreement specifically states that building agricultural buildings is not an agricultural activity. And the guidance states that 'special vehicles' can only be used for accepted purposes, as listed in the MoA. As far as I can see there is nothing in the guidance that creates an exemption for farmers doing construction work on their own land with their own machinery. You are only entitled to do accepted purposes on red, and construction is not one of them, even construction of farm buildings.



You say digging a ditch is not flood protection, I can easily see HMRC see declaring the exact opposite, and acting accordingly. And it would be down to a court to decide. Who fancies being the test case?

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I may have got the construction bit wrong.

HMRC specifically answered the question about ditching in the NFU webinar and were absolutely clear that ditching was part of good agricultural practice as maintenance of the land and could therefore use red. The video is available for NFU members and could be used as evidence in court.

Goweresque said:

I think what you're missing is that the list of 'special vehicles' (which includes diggers, cranes, concrete pumps and road rollers) can be used on red but only when they are doing one of the 'accepted purposes', the link for which takes you to the Memorandum of Agreement (Excise Notice no 75) which I think you were involved in drawing up with HMRC.

Using rebated fuels in vehicles and machines (Excise Notice 75)

Find out when you can use rebated diesel, biodiesel or kerosene in vehicles and other machinery.

www.gov.uk

Quote:

Agriculture, horticulture, fish farming and forestry sectors​

You will be able to use rebated fuel in vehicles and machines used for accepted purposes if you’re in any of the following sectors:

• agriculture
• horticulture
• fish farming
• forestry

Rebated fuel can be used for accepted purposes in:

• • agricultural vehicles
  • special vehicles
  • unlicensed vehicles
  • certain machines and appliances

And:

Special vehicles​

A special vehicle is a vehicle designed, constructed and used as set out in Part 4 of Schedule 1 to the Vehicle Excise and Registration Act 1994, but without any weight restriction.

Special vehicles include:

• digging machines
• mobile cranes
• mobile pumping vehicles
• work trucks
• road rollers

Note it says rebated fuel can be used in special vehicles for accepted purposes. Ergo a special vehicle NOT doing accepted purposes (ie a digger on a construction site) may not use red.

I also note the Memorandum of Agreement also excludes construction of agricultural buildings from falling within the definition of agricultural activities. I therefore conclude that a farmer using his own digger on his own farm to set out a new building should be operating on white.

The problem here is that the Memorandum of Agreement was drawn up with regards to road use - eg construction was defined as non-ag so as to prevent you moving a digger on the road using red to a construction site. The same memorandum is now being used to define what is agricultural on farms themselves, not just in relation to road use. For example the Memorandum defines flood protection work as non-agricultural. Ergo it is at least arguable that digging out ditches on a farm is flood protection work and thus is no longer an 'accepted purpose' that allows red to be used.

The whole thing is a complete mess. And I suspect its going to take lots of poor sods being dragged through the courts to try and make some sense of it all.

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I wholeheartedly agree with you that it’s definitely not clear. I read those rules and come up with a completely different interpretation from you. As you quite rightly recall I did help write the MoA. It was originally written to apply to vehicles in the Ag Machine taxation class, it definitely didn’t apply to mobile cranes, mobile pumps ( concrete pumping machines to you and I ) etc.
If you go back to the beginnings when we used to nip down to the post office and pay our 30 quid to tax a tractor the clerk used to write on the disc agricultural machine and that category entitled that machine to use rebated fuel on the road. In those days and up until the 1st of April any machine used off road and excepted vehicles with certain taxation classes were entitled to use red. Those classes of vehicles entitled to use red were generally vehicles whose on road use was incidental to its off road use and generally weren’t capable of hauling a load. Obviously Ag machines were a bit of an exception to some of those rules so the MoA was written to clarify what vehicles in the ag machine category could ( and couldn’t) do.
Other taxation categories entitled to use red were diggers, mobile cranes, mobile pumps, road rollers etc.
As far as I understand now that the law has been changed so that off road use is no longer an entitlement to use rebated fuel the wording of the law, the Hydrocarbon Oil Duty Act ( HODA) 1979 has been amended to change the entitlement to use rebated fuel from off road vehicles to excepted vehicles as defined in Schedule 1 of the act.
I think the confusion arises because you are reading it as saying that all of these categories are only entitled to use rebated fuel when used for agriculture. I read it as ag machines, diggers, mobile pumps etc are all classed as special vehicles. To me logic would have dictated that if you were correct then diggers etc would have to have been made into there own special sub set of agricultural machines when used for agricultural purposes. The ag machine category already has provision for different sub sets those being tractors, ag materials handlers, amv’s, ag engines and ag processing vehicles. As such I would suggest that the law, as it is written, entitles diggers, mobile cranes etc. to use rebated fuel regardless of their use which is contradictory to what I think both you and I think the Governments position is on this and this is why I agree with you that it needs clarification.

Goweresque said:

This guidance from HMRC specifically states that swapping between red and white is allowed, subject to making sure that all traces of red are removed before moving to white:

Using rebated fuels in vehicles and machines (Excise Notice 75)

Find out when you can use rebated diesel, biodiesel or kerosene in vehicles and other machinery.

www.gov.uk

So basically there are jobs that now allow you to use red and jobs that require white, in exactly the same piece of machinery, a generator say, or an excavator. Hence my point - in practical terms many machines one might hire in onto a farm will require to be on white, because swapping them to red and back again will either be a complicated job, or more likely prohibited under the terms of the hire.

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So twin tanks, filters and fuel lines to the injectors. Run on white for a few mins when finishing off an Ag operation, and then good to go?

Seem to recall the odd Landy back in the 70s doing this... Small white tank for dipping, then red in the back!

So were do AD plants stand in all this red & White fuel thing , feed stock is a agric crop but the plant that eats it is not.

Speedstar said:

So were do AD plants stand in all this red & White fuel thing , feed stock is a agric crop but the plant that eats it is not.

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Loading the AD out of the clamp is on white as non agricultural, hauling digestate as part of a spreading operation, red. Hauling digestate into a store is transport so white.

Speedstar said:

So were do AD plants stand in all this red & White fuel thing , feed stock is a agric crop but the plant that eats it is not.

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I think you’ve answered your own question, although, as I said before, I’ve been out of the loop for a bit.

mo! said:

Loading the AD out of the clamp is on white as non agricultural, hauling digestate as part of a spreading operation, red. Hauling digestate into a store is transport so white.

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I would have thought that hauling the digestate is always white even if you’re spreading it as you’re disposing waste from an industrial process.

Simon Chiles said:

I would have thought that hauling the digestate is always white even if you’re spreading it as you’re disposing waste from an industrial process.

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Or are you applying fert to agricultural land?

steveR said:

So twin tanks, filters and fuel lines to the injectors. Run on white for a few mins when finishing off an Ag operation, and then good to go?

Seem to recall the odd Landy back in the 70s doing this... Small white tank for dipping, then red in the back!

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Twin tanks with red and White remain ILLEGAL . Official line is where possible have a dedicated machine for white operations or you have to drain and flush tanks and filters AND keep records for proof.

Tarw Coch said:

Or are you applying fert to agricultural land?

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I’m not certain about the intricacies of AD plants but you might need to consider this from the MoA :-
This does not include:

• household furniture or fittings
• supplies required for domestic use
• organic waste for disposal on agricultural land
• 
  
  
• I think that both you and I would consider sewage sludge as being a fertiliser but that is always white so I should imagine digestate was too. I had a call from someone who was using Red to spread sewage sludge and got caught. The fine was so large he had to make 8 blokes redundant, sell his machinery and his house. It’s important to get it right.

So if you own a 360 with tree shear, coppicing a neighbouring farmers hedge would be forestry/ag, doing the same on a private dwelling or equestrian set up would not.
The other issue is having to have a white diesel tank just for 1 machine.

Simon Chiles said:

I’m not certain about the intricacies of AD plants but you might need to consider this from the MoA :-
This does not include:

• household furniture or fittings
• supplies required for domestic use
• organic waste for disposal on agricultural land
• 
  
  
• I think that both you and I would consider sewage sludge as being a fertiliser but that is always white so I should imagine digestate was too. I had a call from someone who was using Red to spread sewage sludge and got caught. The fine was so large he had to make 8 blokes redundant, sell his machinery and his house. It’s important to get it right.

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I suppose the moving of sewage sludge could be deemed to be non agricultural as its origins certainly aren’t agricultural even if it’s end use is.

Digestate or at least digestate derived from digesters run on crops could be said to be from an agricultural source. If it were classed as non agricultural then that would raise questions as to wether the rest of the operation would be classed as agricultural, from harvesting right back through to the sowing of the crops when the whole purpose of the operation is to generate gas/electricity.
I guess it’s relatively straightforward to single out the moving of digestate whereas the growing of the crops isn’t as they could be used for food or digester fuel right up to the point they’re put into the digester.


I don’t envy those who have to make up the rules, a line has to be drawn somewhere and as can be seen here, it’s not always easy to draw that line in black and white so it is clear for everyone

powerontheland said:

Twin tanks with red and White remain ILLEGAL . Official line is where possible have a dedicated machine for white operations or you have to drain and flush tanks and filters AND keep records for proof.

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Demountable tanks then. 5 min swap, two lines still to ease transition between the two fuels.

A PITA, but still a lot quicker than draining and flushing a tank and lines.

This is just another stealth tax that consumers will be paying. Everything from a bag of gravel to a new house will cost consumers more. It's a nonsense. The theft of diesel from plant will be a big issue and will be totally untraceable.

ollie989898 said:

This is just another stealth tax that consumers will be paying. Everything from a bag of gravel to a new house will cost consumers more. It's a nonsense. The theft of diesel from plant will be a big issue and will be totally untraceable.

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You can put a "DNA" marker in it I believe.

This might lead to a reduction in Red thefts though...?

Vader said:

If its for farm stuff its farm.
Why even think to complicate it...?
If I put a shed up on farm its a farm shed.
If I put a fence up on the farm, it's a farm fence.
Quite simple...

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Sorry to jump on this post! But could someone clarify for me that a agricultural fencing contractor has to run his tractors on white?? I have tried to order red (which we have done for years) and I’ve been told we now have to run on white?? Thank you so much

What is the difference in price between ag fuel and road fuel in UK these days..?