Guidance: Rural Duty Relief Scheme (Notice 2001)

The Rural Fuel Duty Relief gives support to motorists by compensating fuel retailers in some rural areas with high road fuel prices. Other fuel users of full duty petrol and diesel can also claim this relief.

The rural areas were chosen because, before the scheme was introduced:

• pump prices in those areas were much higher than the UK average
• the remoteness of those areas leads to high fuel transport costs from refinery to filling station
• relatively low sales means that these fuel retailers cannot benefit from bulk discounts on their fuel purchases

The rebate gives a 5 pence per litre reduction to fuel retailers in the specified rural areas on the standard UK rate of excise duty for unleaded petrol and for diesel sold for use other than in excepted vehicles.

A rebate cannot be claimed for rebated fuel sold for excepted machine use (for example, boats and agricultural vehicles). Fuel retailers must begin passing on the 5 pence per litre reduction 60 days after registration at the latest. This is to help fuel users in remote areas where the cost of petrol and diesel is often higher.

From 1 April 2015 changes were made to extend the relief to more specified rural areas. HMRC can consider late claims, where there is reasonable cause.

From 1 April 2022 changes were made to extend the relief to sales of fully taxed fuel used for machines no longer entitled to use rebated fuels.

About this notice

This notice contains information:

• about the Rural Fuel Duty Relief Scheme for retailers of fuel
• on the specific rural areas that are eligible for the relief
• on the registration process and how claims could be made

Who should read this notice

Retailers of unleaded petrol and fully duty-paid diesel sold as fuel within the areas shown in the paragraph about how the relief scheme works.

Law covered in this notice

UK law:

• The Hydrocarbon Oil Duties Act 1979
• The Hydrocarbon Oil and Biofuels (Road Fuel in Defined Areas) (Reliefs) Regulations 2011
• The Hydrocarbon Oil and Biofuels (Road Fuel in Defined Areas) (Reliefs) (Amendment) Regulations 2015

Rural Fuel Duty Relief

Who can claim relief

You can claim relief if you are a retailer of fuel (unleaded petrol and fully duty-paid diesel) in the specified areas. You are not eligible to register if you buy fuel in bulk for example, for your own business use.

How the relief scheme works

You can register with HMRC to claim 5 pence per litre relief on fuel you purchase if you are a retailer of qualifying fuel within the areas of the:

• Inner and Outer Hebrides
• Northern Isles
• Islands in the Clyde
• Isles of Scilly
• post town of Hawes (Northern Yorkshire)
• post code districts in:
  • England — EX35, LA17, NE48
  • Scotland — IV14, IV21, IV22, IV26, IV27, IV54, KW12, PA38, PA80, PH19, PH23, PH36, PH41

The relief is only allowed for fully taxed fuel and retailers in the specified areas and they only need to give the price reduction and claim the relief where fuel has been used other than for an excepted machine.

The start date on the scheme is the date of approval on your registration form. You can only start to make a claim when you are registered. Retrospective claims cannot be made for any period.

Claims must be made on a monthly basis. You have 60 days following your registration to reduce the cost of every litre of fully taxed fuel sold by the equivalent amount of the relief claimed.

The 60-day period

This is the 60-day period after we confirm you have registered as a retailer and are not required to pass on the relief.

This introductory period is designed to help you avoid initial cash flow problems. By law, retailers must pass on the full relief to consumers once this introductory 60-day period has come to an end. You can begin to pass on the relief to consumers before the 60 days are over, if you want to.

The 60-day period makes sure customers in the eligible areas benefit from the reduction in fuel duty.

How to register

To register you need to complete form Registration to claim Fuel Duty relief. The form can be completed electronically but must be printed, signed and then returned by post to:

A separate registration is needed for each retail premises.

We will write to confirm that you are registered as a qualified claimant.

You must also tell us if, at some later date, you want to do any of the following:

• add a new premises that is situated within any of the areas, postcodes or post town covered by the relief
• stop trading as a retail fuel site within these postcodes
• sell a business premises that is registered in this scheme to another retail operator

How to claim relief

To claim relief you must:

• register with HMRC to claim the relief – we will not accept a claim from any retailer who is not registered
• complete form Claim Fuel Duty Relief (HO81) — claim periods are based on a calendar month and you can only submit one claim per month
• sign and date the form and declare that the information provided on it is true and complete
• send your claims in time so that it is received by HMRC no later than 30 days after the end of the month to which it relates — a claim will not normally be paid if it is received after the 30-day period

Information needed on the claim form

You will need to give the following details of the fuel you have bought and which you are claiming relief for:

• date of the purchase
• name of the supplier
• period of claim
• reference of the purchase, such as invoice number
• total volume in litres of unleaded petrol purchased in the period
• total volume in litres of full duty-paid diesel purchased in the period
• amount of the claim

How the relief is calculated

The following are calculations to work out the amount you can claim of volume in litres of:

• unleaded petrol you purchased × 5 pence = A
• full duty-paid diesel you purchased × 5 pence = B

Add A and B together to work out the total amount of your claim.

Records you must keep

You must keep:

• evidence of all your purchases, such as invoices for fuel on which your relief has been claimed
• your normal business records and produce them to HMRC if asked to do so
• evidence that the 5 pence per litre saving has been passed onto your customers

Evidence for your relief claim

You do not need to send evidence for your claim with your return but you should keep it as part of your records. HMRC will contact you if they want to verify your claim.

Circumstances HMRC accepts relief claims submitted later than 30-day period

Late claims will only be accepted in exceptional circumstances — genuine mistakes, honesty and acting in good faith are not accepted as a reasonable cause for submitting the claims late (such as, outside the 30-day period).

You must send your returns as soon as possible after your reasonable cause is resolved.

How long it will take to process your claim

If we are satisfied with the evidence sent, we will aim to process your claim within 30 days from its receipt.

HMRC can make payment at a later date if additional evidence or information has been asked for in connection with the claim.

Your rights and obligations

Read Your 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 email: customerexperience.indirecttaxes@hmrc.gov.uk.

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If you need general help with this notice or have any questions you should phone our helpline on telephone: 0300 200 3700.

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