SPOA Members to prepare for the removal of red diesel subsidy from April 2022

Following today’s budget announcement, the SPOA is disappointed to report that the Government has not supported the plant hire industry by continuing with the red diesel subsidy, despite the SPOA and industries best efforts.

Members should prepare for the removal of red diesel subsidy from 1 April 2022 - we would draw your attention to sections 2.34, 3.12, 3.13, 5.5 and 7.2 of the summary of responses to the consultation which we believe would be particularly relevant to the SPOA members.

2.34 - In addition, following consultation, the government has decided to grant further entitlement to use red diesel for: • The commercial boat operating industry, including but not limited to the fishing and inland water freight industries and passenger ferries. • The travelling fairground and circus industries when diesel is used for powering their machinery (including their caravans). • Non-commercial power generation, including households who rely on red diesel for electricity generation in areas not connected to the electricity grid. • Amateur sports clubs as well as all golf courses. This includes activities such as ground maintenance and the heating and lighting of the clubhouse and changing rooms. Amateur sports clubs will qualify if they are registered as community amateur sports clubs (CASCs).

3.12 - The government has also decided to stick with its proposal that end users will not be mandated to flush out the tanks of their vehicles or machinery as this can be expensive and this approach also avoids damage to the environment that could arise from the unsupervised and unsafe disposal of red diesel. However, the government expects users of vehicles and machinery losing their red diesel entitlement to ensure that they do not purchase red diesel for use from 1 April 2022 and run down their existing stocks before that date. Fuel put into these vehicles and machinery after that date will be liable for forfeiture and penalties as it will be illegal fuel use, and so end users should not be stockpiling fuel before April 2022.

3.13 - In response to users raising concerns about their ability to run down fuel stocks in back-up generators, the government has decided to give HMRC officers the ability to disapply the liability to seizure where the user can provide evidence to satisfy officers that they have not built up their stocks or taken red diesel into the fuel system after the rules changed. The government recognises that for some users, for example, a data centre that holds a 3-day supply of diesel in their generator in case of emergencies but may only use it for a few hours a year, their last purchase of red diesel may be some time before the tax change.​​​​​​​

5.5 - With regard to the possibility of fuel theft, the government is determined to drive down crime in rural and urban areas, which is why it is recruiting an additional 20,000 police officers over the next three years, with 4,000 of these officers already on the UK’s streets. This is unprecedented and reflects the biggest recruitment drive in decades.

7.2 - HMRC will work closely with fuel suppliers and trade bodies representing sectors that will lose their red diesel entitlement ahead of the introduction of the tax changes to ensure businesses understand what these changes are and are clear on what they will need to do in preparation. This includes working with fuel suppliers and trade bodies to communicate the changes with sufficient notice to all their customers and members so that they avoid purchasing fuel that they will not be able to use up by April 2022. HMRC will publish guidance providing more detail on these next steps later this year.

The Scottish Plant Owners Association will continue to fight your corner on this matter and will update you on further releases from HM Treasury regarding the removal of red diesel rebate in our sector along with advice on how you can prepare for 1st April 2022 and what alternatives are available.

We welcome members to contact us with any questions or concerns by email at  

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