That will mean a saving of £1,200 since 2010, but at a cost of more than £100bn to the exchequer. He is likely to end its subsidy, which will save the Treasury £2.4 billion a year. Farmers have been made exempt from the abolishment of the fuel tax subsidy for red diesel in chancellor Rishi Sunak's 2020 Budget. This distinction will end following implementation of the announced measures, although vessels containing a separate onboard tank for heating purposes may continue to use red diesel for heating purposes only.

The newspaper reports that the £2.4 billion diesel subsidy for agricultural and construction vehicles is likely to be among the first measures to be scrapped. Fuel duty. Red diesel is typically used in agriculture and is taxed at just 11.14 pence per litre compared to 57.95 pence per litre for standard diesel, but it is also used to power 90% of all rail freight as well as secondary engines for refrigeration lorries, off-grid heating and construction equipment, meaning private companies such as Sainsbury’s, Veolia and JCB have benefitted from cheaper fuel. The plans are understood to be part of Government efforts to encourage drivers to move to electric vehicles. Red diesel is licensed for use in vehicles that do not use roads. These craft users would have to use fuel that has had duty paid at 57.95p per litre … However, it has been frozen for the 11th year running, meaning that the duty - applied on top of VAT - will remain at 57.95p per litre for petrol and diesel. Duty on LPG remains at 31.61ppl. They will still be entitled to use red diesel for their heating use. However, many craft do not have the space for a separate tank and associated other equipment. A Budget decision to close a red diesel tax loophole will add up to £5,000 to the cost of building every new home, one of the UK's leading suppliers is warning. Picture: Ian Burt Archant 2018 Limited red diesel reprieve Rishi Sunak also announced subsidies for red diesel for ‘most sectors’ will be removed.
However, it has been frozen for the 11th year running, meaning that the duty - applied on top of VAT - will remain at 57.95p per litre for petrol and diesel. From April 2022, red diesel will be available only to agriculture and the rail sector. Fuel duty freeze rumours. It has a fuel duty of 11p per litre compared to 58p for regular diesel. Duty on LPG remains at 31.61ppl. Red diesel: Prohibition of use for propelling private pleasure craft – Private pleasure craft already pay the standard white diesel rate for propulsion. He said: "The Red Diesel scheme allows selected users to pay duty of just over 11p per litre for diesel, compared to almost 58p per litre for everyone else. Tax on red diesel amounts to 11.1p/L compared with 57.7p/L on white diesel. News that the UK government has stood down on a rumoured increase in red diesel duty for farmers and fishermen was widely welcomed, following Wednesday’s budget announcement. Red diesel sales account for about 15% of total diesel sales and costs the Treasury some £2.4bn/year in revenue. Budget ‘backtrack’ on red diesel duty rise welcomed March 14, 2020 at 8:00 am There had been significant concern that Wednesday’s budget would include a rise in duty for red diesel. Under the current legislation, operators of private pleasure craft are permitted to use red diesel for convenience, although they are required to pay the full rate of duty on the fuel.

The chancellor says fuel duty will remain frozen for another year. But Mr Sunak is today expected to take action on high polluting red diesel, used by off-road vehicles.