The Hydrocarbon Oil (Payment of Rebates) Regulations 1996

Explanatory Note

(This note is not part of the Regulations)

1.  These Regulations— U.K.

(a) replace regulations 31 to 33 of the Hydrocarbon Oil Regulations 1973 No. 1311 (regulatory scheme for the advance payment of rebate (“the rebate”) allowed on gas oil, and other heavy oil—the use of which is governed by section 12 of the Hydrocarbon Oil Duties Act 1979 (c. 5) (“HODA”)—under section 11 of HODA) with a revised similar scheme for advance payments; and

(b) apply that revised scheme additionally to the advance payment of part of the section 11(1)(c) HODA rebate (“the net excise duty”) allowed in respect of kerosene (governed by sections 13AA and 13AB HODA, which sections are added to HODA by section 5 of the Finance Act 1996 (c. 8)), where the rebated kerosene is to be used as fuel for certain engines defined by section 13AA of HODA.

2.  Scheme of these Regulations. U.K.

Regulation 3 provides definitions of certain words and phrases used in the Regulations.

Regulation 4 requires that, for a payment of the rebate or of the net excise duty to be effective for the purposes of respectively section 12(2) or section 13AA (3) and (4) of HODA, the advance payment must be made by a licensed user of the rebated gas oil or rebated kerosene in accordance with the scheme of advance payment governed by regulations 5 and 6. Users will be licensed for these purposes by the Commissioners of Customs and Excise.

Regulation 5 enables a licensed user to provide the Commissioners with an estimate of his future use of gas oil or kerosene during an accounting period, and requires him, on furnishing the estimate, to make an advance payment to them of the rebate, or as the case may be, of the net excise duty, calculated in accordance with the provisions of regulation 5(3). The estimate is in the form no. 1 of Schedule 1 to these Regulations.

Regulation 6 recognises, firstly, that the actual usage by the licensed user, during the accounting period to which his estimate relates, may reach the estimated or forecast usage before the end of that period. In that event regulation 6(4)(a) and (5) requires him to cease using rebated gas oil or kerosene as fuel. The regulation enables him to recommence use of those rebated fuels provided he first furnishes the Commissioners with a supplementary estimate (in the form no. 2 of Schedule 1 to these Regulations) of estimated future use during the remainder of the accounting period, and makes an associated advance payment of the rebate, or as the case may be, of the net excise duty in respect of that estimated future use.

Regulation 6, secondly, takes account of the possibility that, during the accounting period to which the user’s estimate relates, there may be a change of either or both the hydrocarbon oil excise duty rate (governed by section 6 of HODA), and the excise duty rebate rate (governed by section 11 of HODA), with the result, as it may be, that the actual excise duty charged or actual rebate allowed is increased by an additional amount (“the additional amount”), and consequently the advance payment made with the estimate becomes insufficient. In such a case (as governed by regulation 6(4)(b)) the licensed user is required to cease using oils to which his estimate relates, and, before recommencing, he is required to pay the additional amount to the Commissioners (by furnishing an additional rebate payment form in the form no. 3 of Schedule 1 to these Regulations) in respect of rebated fuel which he is yet to use. The additional amount is calculated in accordance with the provisions of that form, no. 3.

Regulation 7 treats any supplementary estimate, that may have been furnished by a licensed user, as if it was an estimate, to ensure that, in the event of the supplementary estimate’s forecast of future usage of rebated fuel, or of the amount of advance payment of the rebate or the net excise duty, made in association with the supplementary estimate, proving to be insufficient (for the same reasons explained above in relation to regulation 6), the licensed user makes further advance payment(s) to make good the insufficiency.

Regulation 8 requires a licensed user, and a user whose licence has been withdrawn, to make a return to the Commissioners within 10 business days of the end of the accounting period to which the estimate relates. In his return the user may claim amounts which he may have overpaid.

Regulation 9 requires licensed users, and users whose licence has been withdrawn, to keep records relating to the rebated gas oil or kerosene used in their road vehicles.