May 11, 2022

HMRC confirms use of red diesel in tractor races

The use of red diesel is now permitted in charity tractor races following clarification from HMRC.

Guidelines on “the use of rebated fuels in vehicles and machinery” (Excise Notice 75) have now been amended and will allow tractor races, plowing contests and agricultural shows to continue in as activities accepted as “for purposes related to agriculture, horticulture and forestry”.

The Ulster Farmers’ Union (UFU) welcomed the news, saying changes to HMRC’s use of fuel discount advice will be welcomed by the farming community.

The updated guidance states that activities falling under the definition of agriculture will include “organizing or participating in events that provide information and education for the benefit of agriculture, horticulture or forestry , including participation in charitable activities that promote these industries”.

UFU Vice-Chairman David Brown said: ‘HMRC has made the right decision in including tractor races, in addition to shows and plowing matches as activities which provide information, education and raise funds for charity.

“This will be welcomed by our members and the rural communities who organize tractor races and many other agricultural events to raise vital funds for charities across Northern Ireland.

“Earlier in the month, HMRC rolled back changes to the rules for using red diesel, to include plowing matches and agricultural shows, but omitted tractor races.

“We have expressed our disappointment to HMRC that tractor races held as charity events or for educational purposes have not been included in this amendment and it is encouraging that they have reviewed this position following pressure from the industry and politicians. It is good that common sense has prevailed and that our rural communities can continue to raise vital funds through tractor races and other agricultural events.

However, DUP Upper Bann MP Carla Lockhart believes there has been a missed opportunity to completely suspend the removal of the red diesel rebate on April 1.

Ms Lockhart said: ‘The Treasury has now said that the red diesel changes will not apply to tractor races and people participating in such fundraisers will be able to use red diesel. This was confirmed in writing by Exchequer Secretary Helen Whately. If this is correct, that is good news, but it still does not help our construction, transport, waste and quarrying sector.

“HMT is deaf to this issue and has treated these industries appallingly without engaging or dismissing their concerns. If HMT does not back down from this proposed change, it will see major job losses, a construction slump, rising food prices and transport costs, and ultimately the closure of businesses.

“It is no exaggeration to say that the cost in terms of sustainability and the sustainability of the company will be extremely high.

“I have constantly challenged the government on this policy stressing that it is the right policy but the wrong time. No greener alternative exists on the market and the emissions will be the same whether the vehicle runs on red diesel or The government is silent when asked about claims that it will improve air quality and help achieve Net Zero because it knows it will not.

She added: “We are asking for five years to allow alternatives to find their way into the market. If the UK government is serious about upgrading and improving infrastructure, it must support our local businesses and not penalize them financially with this tax grab.


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