Finance Bill

House of Commons

Session 2007 - 08
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Finance Bill

Finance Bill (Volume I)
Schedule 6 — Aircraft and boat fuel, heating oil and fuel used for certain engines
Part 1 — Fuel used in aircraft and boats
149

Schedule 6
Section 14

Aircraft and boat fuel, heating oil and fuel used for certain engines
Part 1
Fuel used in aircraft and boats
Aviation gasoline
5
1
HODA 1979 is amended as follows.
2
In section 1 (hydrocarbon oil), after subsection (3C) insert—
“(3D)
“Aviation gasoline” means light oil which—
(a)
is specially produced as fuel for aircraft,
(b)
at 37.8oC, has a Reid Vapour Pressure of not less than 38kPa
10
and not more than 49kPa, and
(c)
is delivered for use solely as fuel for aircraft.”
3
In section 2A(1) (power to amend definitions), before paragraph (a) insert—
“(za)
aviation gasoline;”.
4     (1)
Section 6 (hydrocarbon oil: rates of duty) is amended as follows.
15
      (2)
In subsection (1), for the words from the beginning to “below, there”
substitute “There”.
      (3)
Omit subsections (3) and (4).
5
In section 24(1) (control of use of duty-free and rebated oil), omit “section
6(3),”.
20
6
In section 27(1) (interpretation), in the definition of “aviation gasoline”, for
“section 6(4) above” substitute “section 1(3D)”.
7
In Schedule 3 (regulations under section 21), omit paragraph 10A.
8
In consequence of the amendments made by paragraphs 2 to 7, omit—
(a)
in FA 1982, section 4(2), (3) and (7),
25
(b)
in FA 1990, section 3(5), and
(c)
in FA 1998, section 6(1)(a).
Kerosene used for aviation (avtur)
9
HODA 1979 is amended as follows.
10
In the heading of section 13AB, for “misuse of kerosene” substitute
30
“contravention of section 13AA”.
11
After that section insert—
“13AC
Use of rebated kerosene for private pleasure-flying
(1)
This section applies in respect of kerosene upon which a rebate
under section 11(1)(c) has been allowed.
35
(2)
The kerosene must not be used as fuel for private pleasure-flying.

Finance Bill (Volume I)
Schedule 6 — Aircraft and boat fuel, heating oil and fuel used for certain engines
Part 1 — Fuel used in aircraft and boats
150

(3)
If, on the supply of a quantity of the kerosene to a person, the person
makes a relevant declaration to the supplier—
(a)
subsection (2) does not apply in relation to that kerosene, and
(b)
the person must pay, in accordance with regulations, the
amount specified in subsection (4) to the Commissioners.
5
(4)
The amount is—

where—
Q is the quantity (in litres) of the kerosene, and
R is the rate of the rebate under section 11(1)(c) at the time of the
declaration.
10
(5)
The amount referred to in subsection (3)(b) is to be treated, for the
purposes of section 12 of the Finance Act 1994 (assessments to excise
duty), as an amount of excise duty.
(6)
Regulations may provide, in cases where kerosene to which
subsection (2) applies and other kerosene is taken into an aircraft as
15
fuel, for the order in which the different kinds of kerosene are to be
treated (for the purposes of this section and section 13AD) as used.
(7)
In this section—
“private pleasure-flying” has the same meaning as in Article
14(1)(b) of Council Directive 2003/96/EC (taxation of energy
20
products etc),
“regulations” means regulations under section 24(1) made for
the purposes of this section, and
“relevant declaration”, in relation to a quantity of kerosene,
means a declaration, made in the way and form specified by
25
or under regulations, that the kerosene is to be used for
private pleasure-flying.
13AD
Penalties for contravention of section 13AC
(1)
This section applies if a person—
(a)
uses a quantity of kerosene in contravention of section
30
13AC(2), or
(b)
fails to comply with section 13AC(3)(b).
(2)
The Commissioners may assess the amount specified in section
13AC(4) as being excise duty due from the person, and may notify
the person or the person’s representative accordingly.
35
(3)
The use or failure attracts a penalty under section 9 of the Finance Act
1994 (civil penalties).
(4)
For the purposes of that section, if this section applies by virtue of
subsection (1)(b)—
(a)
the amount referred to in section 13AC(3)(b) is to be treated
40
as an amount of excise duty,
(b)
the penalty for the failure is to be calculated by reference to
that amount, and
(c)
the failure also attracts daily penalties.

Finance Bill (Volume I)
Schedule 6 — Aircraft and boat fuel, heating oil and fuel used for certain engines
Part 1 — Fuel used in aircraft and boats
151

(5)
If this section applies by virtue of subsection (1)(a), for the purpose
of subsection (2) the reference in section 13AC(4) to the time of the
declaration is to be read as the time of use.”
Fuel for private pleasure craft
12
HODA 1979 is amended as follows.
5
13    (1)
Section 14A (rebate on biodiesel used other than as fuel for road vehicles) is
amended as follows.
      (2)
In subsection (1)—
(a)
omit the “or” at the end of paragraph (a),
(b)
after that paragraph insert—
10
“(aa)
used as fuel for propelling private pleasure craft, or”,
and
(c)
in paragraph (b), for “so used” substitute “used as mentioned in
paragraph (a) or (aa)”.
      (3)
After subsection (3) insert—
15
“(4)
In this section “private pleasure craft” has the same meaning as in
section 14E.”
      (4)
Accordingly, in the heading, insert at the end “etc”.
14    (1)
Section 14C (restrictions on use of rebated biodiesel and bioblend) is
amended as follows.
20
      (2)
In subsection (1)—
(a)
omit the “or” at the end of paragraph (b), and
(b)
after paragraph (c) insert “, or
(d)
(in the case of rebated biodiesel) used as fuel for
propelling private pleasure craft or as an additive or
25
extender in any substance so used.”
      (3)
After subsection (4) insert—
“(4A)
In subsection (1) “private pleasure craft” has the same meaning as in
section 14E.”
15
After section 14D insert—
30
“14E
Rebated heavy oil and bioblend: private pleasure craft
(1)
This section applies in respect of rebated heavy oil or bioblend.
(2)
The heavy oil or bioblend must not be used as fuel for propelling
private pleasure craft.
(3)
If, on the supply by a person (“the supplier”) of a quantity of the
35
heavy oil or bioblend to another person, the other person makes a
relevant declaration to the supplier—
(a)
subsection (2) does not apply in relation to that heavy oil or
bioblend, and
(b)
the supplier must pay, in accordance with regulations, the
40
amount specified in subsection (4) to the Commissioners.

Finance Bill (Volume I)
Schedule 6 — Aircraft and boat fuel, heating oil and fuel used for certain engines
Part 1 — Fuel used in aircraft and boats
152

(4)
The amount is—

where—
Q is the quantity (in litres) of the heavy oil or bioblend, and
R is the rate of the relevant rebate at the time of supply.
(5)
The “relevant rebate” is—
5
(a)
in the case of heavy oil upon which rebate was allowed under
section 13ZA or 13AA(1), the rebate under that provision,
(b)
in the case of heavy oil to which paragraph (a) does not apply,
the rebate under section 11 for that kind of heavy oil, and
(c)
in the case of bioblend, the rebate under section 11(1)(b).
10
(6)
The amount referred to in subsection (3)(b) is to be treated, for the
purposes of section 12 of the Finance Act 1994 (assessments to excise
duty), as an amount of excise duty.
(7)
Regulations may provide, in cases where heavy oil or bioblend to
which subsection (2) applies and other heavy oil or bioblend is taken
15
into a craft as fuel, for the order in which the different substances are
to be treated (for the purposes of this section and section 14F) as
used.
(8)
In this section—
“private pleasure craft” has the same meaning as in Article
20
14(1)(c) of Council Directive 2003/96/EC (taxation of energy
products etc),
“regulations” means regulations under section 24(1) made for
the purposes of this section, and
“relevant declaration”, in relation to a quantity of heavy oil or
25
bioblend, means a declaration, made in the way and form
specified by or under regulations, that the heavy oil or
bioblend is to be used as fuel for propelling private pleasure
craft.
14F
Penalties for contravention of section 14E
30
(1)
This section applies if a person—
(a)
uses a quantity of rebated heavy oil or bioblend in
contravention of section 14E(2), or
(b)
fails to comply with section 14E(3)(b).
(2)
The Commissioners may assess the amount specified in section
35
14E(4) as being excise duty due from the person, and may notify the
person or the person’s representative accordingly.
(3)
The use or failure attracts a penalty under section 9 of the Finance Act
1994 (civil penalties).
(4)
For the purposes of that section, if this section applies by virtue of
40
subsection (1)(b)—
(a)
the amount referred to in section 14E(3)(b) is to be treated as
an amount of excise duty,
(b)
the penalty for the failure is to be calculated by reference to
that amount, and
45

Finance Bill (Volume I)
Schedule 6 — Aircraft and boat fuel, heating oil and fuel used for certain engines
Part 2 — Heavy oil used for heating or as fuel for certain engines
153

(c)
the failure also attracts daily penalties.
(5)
If this section applies by virtue of subsection (1)(a), for the purpose
of subsection (2) the reference in section 14E(4) to the time of supply
is to be read as the time of use.”
16
In section 24(1) (control of use of duty-free and rebated oil), for “14C”
5
substitute “14E”.
Consequential amendments
17
FA 1994 is amended as follows.
18
In section 12A(3)(c) (other assessment relating to excise duty matters)—
(a)
after “13AB,” insert “13AD,”, and
10
(b)
after “14,” insert “14F,”.
19
In section 12B(2)(f) (section 12A: supplementary provisions)—
(a)
after “13AB,” insert “13AD,”, and
(b)
after “14” insert “, 14F”.
20
In section 14(1)(ba) (requirement for review of a decision)—
15
(a)
after “13AB,” insert “13AD,”, and
(b)
after “14,” insert “14F,”.
Commencement etc
21
The amendments made by this Part of this Schedule come into force on 1
November 2008.
20
22
But section 13AC(2) of HODA 1979 does not apply to kerosene upon which
a rebate under section 11(1)(c) of that Act was allowed before that date if it
was supplied for use as fuel for an aircraft before that date.
23
And section 14E(2) of that Act does not apply to heavy oil or bioblend upon
which a rebate was allowed before that date if it was supplied for use as fuel
25
for a craft before that date.
Part 2
Heavy oil used for heating or as fuel for certain engines
Amendments of HODA 1979
24
HODA 1979 is amended as follows.
30
25
In section 11(1) (rebate on heavy oil), for “13, 13AA and 13AB below”
substitute “12(1), 13ZA and 13AA(1)”.
26
In section 12(2) (rebated heavy oil not to be used as fuel for road vehicles),
after “above or” insert “section 13ZA or”.
27
In the heading of section 13 (penalties for misuse of rebated heavy oil), for
35
“misuse of rebated heavy oil” substitute “contravention of section 12”.

Finance Bill (Volume I)
Schedule 6 — Aircraft and boat fuel, heating oil and fuel used for certain engines
Part 2 — Heavy oil used for heating or as fuel for certain engines
154

28
After that section insert—
“13ZA
Rebate on certain heavy oil used for heating etc
(1)
This section applies if, on the delivery of heavy oil (other than
kerosene) upon which rebate at the rate mentioned in section 11(1)(c)
would otherwise be allowed, it is intended to use the heavy oil—
5
(a)
for heating, or
(b)
as fuel for an engine.
(2)
Rebate is to be allowed on the heavy oil at the rate mentioned in
section 11(1)(a) (rather than at the rate mentioned in section 11(1)(c)).
(3)
Nothing in this section applies in relation to heavy oil to which
10
section 12(1) applies.
13ZB
Restrictions on supply of certain heavy oil for heating etc
(1)
If a person supplies relevant heavy oil, having reason to believe that
it will be put to a particular use that is a prohibited use—
(a)
the Commissioners may assess the amount specified in
15
subsection (3) as being excise duty due from the person (and
may notify the person or the person’s representative
accordingly), and
(b)
the supply of the heavy oil is conduct that attracts a penalty
under section 9 of the Finance Act 1994 (civil penalties).
20
(2)
Subsection (1) does not apply in relation to a quantity of relevant
heavy oil if (before the time of supply) the amount specified in
subsection (3) has been paid to the Commissioners, in accordance
with regulations, in respect of it.
(3)
The amount is—
25

where—
Q is the quantity (in litres) of the relevant heavy oil, and
RRFO is the rate for rebated fuel oil at the time of payment.
(4)
For the purposes of subsection (3) the rate for rebated fuel oil at any
time is—
30
(a)
the rate of duty under section 6(1A)(c) at that time, minus
(b)
the rate of rebate allowable under section 11(1)(a) at that time.
(5)
In this section—
“prohibited use” means—
(a)
use for heating, or
35
(b)
use as fuel for an engine (except where such use
would amount to use as fuel for a road vehicle),
“regulations” means regulations under section 24(1) made for
the purposes of this section, and
“relevant heavy oil” means heavy oil, other than kerosene, upon
40
which rebate at the rate mentioned in section 11(1)(c) has
been allowed.

Finance Bill (Volume I)
Schedule 7 — Remittance basis
Part 1 — Main provisions
155

(6)
Nothing in this section applies to a person who supplies relevant
heavy oil for re-processing.”
29
In section 20AAA(6)(b) (mixing of rebated oil), before “13AA” insert “13ZA
or”.
30
In section 20AA(1) (power to allow reliefs), after “12(2)” (in both places)
5
insert “, 13ZB(2)”.
31
In section 24(2) (control of use of duty-free and rebated oil), after “12(2),”
insert “13ZB(2),”.
32
In section 27(1) (interpretation), in the definition of “rebate”, after “11,” insert
“13ZA,”.
10
Amendments of FA 1994
33
FA 1994 is amended as follows.
34
In section 12A(3)(c) (other assessment relating to excise duty matters), after
“13,” insert “13ZB,”.
35
In section 12B(2)(f) (section 12A: supplementary provisions), after “13,”
15
insert “13ZB,”.
36
In section 14(1)(ba) (requirement for review of a decision), after “13,” insert
“13ZB,”.
Commencement
37
The amendments made by this Part of this Schedule come into force on 1
20
November 2008.
Schedule 7
Section 23

Remittance basis
Part 1
Main provisions
25
Remittance basis - general
1
In Part 14 of ITA 2007 (income tax liability: miscellaneous rules), before