Biodiesel in a commercial vehicle

[ModernAndy]

Purely theoretical at the moment as I don't have a commercial vehicle but is there anything stopping a person making up to 2,500 litres of biodiesel from chip fat, etc. using their personal allowance (I know it's not a true personal allowance, more a threshold below which HMRC aren't interested) from using that untaxed biodiesel in a commercial vehicle for the purposes of business?

[scdan4]

Nope - don't think they like it. From memory it is a specific exclusion. (Been 5 years since running on veg though, so it may have changed or my memory may be wonky)

Personal allowance for personal use only, not for business.

God knows how they'd ever find out though.

[nyt]

scdan4 said:

God knows how they'd ever find out though.

I know of people prosecuted for using red diesel so they must keep an eye on this sort of thing somehow.

[scdan4]

(again, at least 5 years out of date)

Have been "dipped" by hmrc twice. (In a pick up, so potentially a commercial use vehicle although was wholly private). Both times as soon as no red was found they lost interest. No logs / use / mileage requests at all.

It is trusting to luck though.

[dacouch]

There are many many black cabs who run on bio diesel so I assume commercial vehicles are able to run on it.

The difference in price is not a huge amount but significant enough for a high mileage vehicle to make savings.

www.uptownoil.co.uk/

[226bhp]

Mcdonalds run their trucks on it.

[ModernAndy]

What they're running on will be taxed hence the small price difference. I'm talking about home made biodiesel that will cost from 20p a litre upwards

[scdan4]

dacouch said:

There are many many black cabs who run on bio diesel so I assume commercial vehicles are able to run on it.

The difference in price is not a huge amount but significant enough for a high mileage vehicle to make savings.

www.uptownoil.co.uk/

226bhp said:

Mcdonalds run their trucks on it.

It's to do with the fuel duty.

Of course you can run a commercial on biodiesel, however you have to pay the chancellor fuel duty for each and every litre that you use.

If you go and buy pump bio then it already has fuel duty included in the price - hence its price is very little different to pump "dino" diesel - as that is also predominantly duty rather than material cost. Not forgetting the VAT applicable on top.

Private veg oil users / bio diesel producers have an exemption - they are allowed to use / produce 2500 litres per year without having to pay any fuel duty on it. They are expected to keep records of use / mileage though to prove that they have not exceeded the quota. Businesses are exempt from this exemption - so every litre that is used for business / commercial purpose is supposed to have fuel duty paid on it.

A.N.other catch is those that go to the cash and carry and buy new veg oil to run their vehicles on - currently about 70ppl (?). However if you get caught by a nasty hmrc man you can get a bit of a shock as: Veg oil sold at cash and carry is a foodstuff, so zero rated for vat. Using it as a fuel means that it is a fuelstock, not food, so is no longer zero rated for vat, so although you can use 2500 litres of it and pay no fuel duty, you still, in theory, owe the man the vat for all the oil you have used.

Go over 2500 litres and you owe the fuel duty on the whole lot, not just the amount over the exemption.

Think that's it - as said it's been a while.