Can i reclaim fuel duty paid on biodiesel?

Question

Can i reclaim fuel duty paid on biodiesel?

Answer 1

Yes, but it's complicated.

There is a scheme called Renewable Transport Fuel Obligation (RTFO). Basically, people producing fuel for sale (and adhering to the rules and regs on this, specifically weights and measures) can record the amount of fuel they produce, and claim vouchers from HMRC.

If the major fuel producers do not hit their targets of renewable fuel content at the pump over the course of the year, then these vouchers are given a value equivalent to the amount missed (this is expected to be around 15p/litre.)

The vouchers can then be redeemed for this value, at which point the producer will recieve a payment from HMRC.

It should be pointed out that this is the first year in which this scheme is running, so no-one knows how well it will work. The payment is expected to take place around 2 years after you join the schme, so cash-flow won't benefit till then, since you still have to pay duty in the meantime.

Answer 2

It depends upon when you paid and how much bio-diesel you produced.  Currently bio-diesel is duty free if you produce less than 2,500 litres per annum.  

If you, incorrectly, paid duty on biodiesel after the date this regulation was introduced AND you produced less than 2,500 litres, you should be able to claim this back.

If you are not the producer, but you purchased the biodiesel off another supplier, you have no claim.