Detail

This notice cancels and replaces Notice 184B (March 2002). Details of any changes to the previous version can be found in paragraph 1.1 of this notice.

Other notices on this or related subjects

Motor and heating fuels general information and accounting for Excise Duty and VAT (Excise Notice 179)

Get relief for mineral oil put to certain uses (Excise Notice 184A)

Excise Notice 206: revenue traders’ records

1. General

1.1 Information in this notice

This notice explains how and when you may get a rebate of duty on light oil used as a furnace fuel.

1.2 Who should read this notice

It is for businesses that get light oil for use as furnace fuel. This does not relate to traders who get recovered light oil under the tied oils scheme. For more information about the recovery of waste oil see Get relief for mineral oil put to certain uses (Excise Notice 184A).

1.3 Law covering the rebate

Primarily section 14 of the Hydrocarbon Oil Duties Act 1979 (as amended).

This notice explains how we interpret the law, and is not a substitute for the law.

Find a more complete list of the statutory provisions relating to mineral oils in section 1.3 of Motor and heating fuels general information and accounting for Excise Duty and VAT (Excise Notice 179).

1.4 What the rebate is

If you use light oil as a furnace fuel, you may apply to be approved to receive it at a lower (rebated) rate of duty, read section 2.

1.5 Powers officers have

Our officers have legal powers to:

• enter and inspect premises (other than private dwelling houses)
• inspect plant
• inspect, take account of, test and sample oil and other goods and require information to be furnished about them
• require the provision of facilities for those purposes
• require the provision of accounts and other documents, as well as inspect and make extracts from them — read also Excise Notice 206: revenue traders’ records (regarding examination of records)

1.6 Audit visits

Audit visits will normally be made by prior appointment. When making the appointment the audit officer will indicate generally the procedure to be followed, the documents needed for inspection and the expected duration of the audit.

When our officer visits your premises, you must provide all facilities and assistance that we may need for checking the quantities of oil and examining the premises, records and documents. The officer’s checks and enquiries may extend to oil and goods on the premises that may be directly concerned with rebate allowed under the terms of this notice.

On completion of the audit you can expect the officer to comment upon the findings. A formal letter to you may follow.

1.7 Health and safety requirements

You must:

1. Comply with legal provisions relating to health and safety, and health and safety requirements laid down by competent authorities.
2. Make sure that proper warning notices are displayed and that proper health and safety instructions are issued and observed by staff and visitors.
3. If your employees use special equipment or protective clothing when carrying out any activity similar to that undertaken at your premises by our officers, you must provide similar equipment or clothing for our officers’ use.

2. Approval

2.1 Who can be approved

We only allow approval for businesses dealing in significant annual quantities. We do not define ‘significant’ as each case is judged on its merits.

However, we will consider approving pilot schemes where it can be shown that there is a serious intention to develop or to evaluate the use of light oil as furnace fuel.

2.2 Applying for approval

Your application should give the following information:

Information required	Details
Details (with diagrams)	of: your oil storage facilities all apparatus in which the oil will be vaporised or atomised and burnt, and all pipelines that will convey the oil and the oil vapour.
Methods	of vaporising or atomising and burning
Information on use	including the use of any oil, oil vapour or flue gases containing oil that will be used for any purpose other than as furnace fuel.
Details of accounting methods	including: receipt and use of oil any oil contained in gas delivered to another person, and any oil used other than as furnace fuel.
Estimated annual consumption	in litres.

You should apply for approval by emailing the Mineral Oil Reliefs Centre, at morcapprovalsteam@hmrc.gov.uksbimorcapprovalsteam@hmrc.gov.uk.

2.3 Conditions of approval

You must:

1. Burn the oil in vaporised or atomised form (see paragraph 2.4).
2. Get your supplies of light oil furnace fuel direct from duty-suspended storage. Also, it must have been marked with the required markers set out at section 8.3 of Excise Notice 179 before delivery.
3. Agree to use and account for the oil strictly in accordance with our requirements (see sections 3, 4 and 5).

2.4 Meaning of ‘burn the oil in vaporised or atomised form’

The oil may be vaporised or atomised immediately before burning or may be injected or sprayed into a gas stream and burnt at a distant point or after a period of storage. If you intend to receive and vaporise or atomise rebated light oil for burning by another trader, both of you must apply for approval.

3. Delivery

3.1 Special delivery procedures

If you are approved, you must give your suppliers a certificate stating your entitlement to receive rebated light oil.

For individual deliveries, you should include the following on the written order that states the quantity and description of the oil:

I/We…………………………………………………………………………(your name)

Holder of approval number……………………………………………………………..

Certify purchase and intended use by me/us as furnace fuel.

If you have a regular supplier, you can provide them with a general certificate on your company’s letter-headed paper. This should be in the following form:

To………………………………………………………(name and address of supplier)

I/We hereby certify that I/We hold approval number………………………………….

This number has been granted by HM Revenue and Customs under the Hydrocarbon Oil Duties Act 1979 Section 14 and I/We authorise you to deliver to me/us, on charge of excise duty at the rebated rate, the following light hydrocarbon oils……………………………………………………….. (specify description of the oil)

permitted to be delivered at the rebated rate, to my/our premises

…………………………………………………………………………………………….(address of premises included in your approval)

I/We undertake to account to HM Revenue and Customs for any such oils received by me/us.

Date ………………………Name and signature………………………………………

4. Storage and use

4.1 Requirements regarding storage

You must store rebated light oil separately from other oil.

4.2 Maintaining separate stocks of unrebated light oil for any purpose not covered by an approval

We may allow:

• delivery direct for use as furnace fuel from duty-suspended stocks kept by you for mineral oil producer use on payment of duty at the rebated rate
• the diversion of rebated light oil, or recovered rebated light oil, to an unapproved person for use otherwise than as furnace fuel, on repayment of the rebate

4.3 When you can start to do the procedures outlined

You will have to satisfy us that the nature of your business justifies this and that you have adequate accounting arrangements in place. We will inform you of the procedure regarding duty payment or repayment of the rebate if we accept your application.

4.4 Requirements regarding use

There are requirements regarding use, you must not:

• recover any oil from any gas containing vaporised or atomised rebated light oil
• divert any oil obtained under the approval, or any gas containing such oil, to any other person or to any use other than as furnace fuel

5. Accounting

5.1 When to take account of rebated light oil that has been received under approval

You must take account of such oil:

• on receipt
• on taking into use
• in stock at the end of each accounting period (commercial accounting periods should approximate to a quarterly basis)

5.2 Records you are expected to keep

We expect you to keep at the approved premises a stock account of rebated light oil. You must balance this stock account at least once in each accounting period and it should be available to our officer on demand.

If your normal accounting practice means you will not be stocktaking on a quarterly basis, you must email the Mineral Oil Reliefs Centre at morcapprovalsteam@hmrc.gov.uksbimorcapprovalsteam@hmrc.gov.uk.

More help and advice

If you need general help with this notice or have another question, email the Mineral Oil Reliefs Centre at: morc.exciseenquiries@hmrc.gov.uk.

Your rights and obligations

Read the HMRC charter to find out what you can expect from HMRC and what we expect from you.

Help us improve this notice

If you have any feedback about this notice write to:

Email: oils.policymail@hmrc.gov.uk

This address is not for general enquiries.

You’ll need to include the full title of this notice. Do not include any personal or financial information like your VAT number.

Putting things right

If you are unhappy with HMRC’s service, contact the person or office you’ve been dealing with and they’ll try to put things right.

If you’re still unhappy, find out how to complain to HMRC.