Red diesel is really just regular diesel that is dyed red. Because of its name and the fact that it is differentiated from regular diesel it has caused a lot of confusion. People are eager to know what it is all about as soon as they learn about it.
The basic fact about it is the dye is there because there is a special tax on it for certain diesel vehicles. It needs to look different so the authorities know if somebody is using it when they don’t qualify for the special lower tax on it.
Not everybody can use red dye diesel so you need to know who is able to use it and when it is allowed. Read on for the information.
What is the tax on red dye diesel?
No matter where you are, the red dye in the diesel is to show authorities that there has been a reduction in the taxes or fees for the diesel. The tax in the UK is reduced to 11 pence per litre as opposed to the normal rate of 58 pence. So no matter if you are filling up with red diesel in Birmingham or in Penzance, you will get the same rate.
Although the tax remains the same, keep in mind that the price of the diesel is going to cost more or less depending on where you are when you fill up.
Because of the lower price due to the rebate, it is very tempting for many people to use that to fill up their vehicle. In the following sections you will learn if you qualify to use the red diesel.
Who can use red diesel?
Red diesel is only for use in vehicles for agricultural, fishing, construction and forestry industries. So, any tractor used on a farm, fishing boat, excavator or logging truck is permitted to use the rebated fuel.
The reason for this is that those industries are under a lot of strain and struggle to stay profitable. The rebate is a way for the government to help them increase their profit margins at least a little so they can make a living.
Now, these vehicles must be used in the place where they are doing the work in order to use the red diesel. In other words, you can’t put it in a flatbed lorry and drive around on eht street with it even though it is a construction vehicle. The exception to that is if you are a farmer and need to access another section of a farm and have to travel on a public road to do so. As long as the distance is under 1.5 kilometers.
Is red diesel used for heating?
In the UK, diesel in general is not used for heating homes and buildings. Instead, kerosene, a much cleaner and longer burning fuel is used. Any diesel used for heating is generally in North American and Europe.
Even in those places that use diesel for heating, it may not qualify for the red dye anyway.