Red Diesel Victory for Farmers
07/09/07

A Yorkshire farmer who was helping a neighbour with silage making has won a landmark victory against HM Customs and Excise over the right to use red diesel for the work.

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Historically farmers have been able to use “red” diesel for agricultural purposes, a valuable concession worth millions of pounds a year to the farming industry because of the lower tax rate resulting in a cost of 37p a litre rather than £1 a litre for white diesel on garage forecourts.

The dispute centred on the fact that while the grass had been grown on a farmer’s land and was going to be eaten by his stock, it had been cut by someone else who had taken it to the farm and put it into a pit and rolled it to make silage.

Simon Catterall of Stockton on Tees solicitors, Jacksons, the National Farmers’ Union solicitor for the North East of England, said that this was an agricultural operation and legitimate use of the cheaper fuel.

The Customs and VAT office refuted the submission and sought to levy a substantial back duty penalty.  When the parties could not agree the matter was referred to the full Appeals Unit in Glasgow, at which proceedings HM Customs capitulated and cancelled the assessment.

Greg Proll, Stokesley NFU Group Secretary said: “This is a victory for all farmers across the country.” Mr Catterall added: “This is an excellent result.HM Customs and Revenue may be all-powerful but they are not infallible.”

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