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HMRC Brief 42/08 provides guidance to users of diesel fuelled grass cutting vehicles, such as local authorities, golf course operators and ground staff, on whether the vehicle should be run on red or white diesel.

Schedule 1 of the Hydrocarbons Oil Duties Act 1979 lists the categories of excepted vehicle. Excepted vehicles are those which are entitled to use rebated fuel. The three categories which vehicles undertaking grass cutting work could fit into are:

• unlicensed vehicles not used on public roads
• tractors
• mowing machines

Unlicensed vehicles not used on public roads
A vehicle that is not used on the public road and has no licence under the Vehicle Excise and Registration Act 1994 is an excepted vehicle. If a vehicle has become untaxed since 31 January 1998, it requires a Statutory Off-Road Notification (SORN). Such vehicles are eligible to use red diesel if a SORN declaration has been made. Unlicensed vehicles that do not require a SORN will continue to be able to use red diesel without a SORN declaration if kept off-road. Consequently, a tractor, mower or utility vehicle used for grass cutting which never goes on the public road can be fuelled on red diesel.

Tractors
To qualify in the 'tractors' excepted vehicle category, the vehicle must be an agricultural tractor which the legislation defines as one that:

• is designed and constructed primarily for use otherwise than on roads and
• is used on public roads solely for purposes relating to agriculture, horticulture or forestry; cutting verges bordering public roads; or cutting hedges or trees bordering public roads or bordering verges which border public roads.

The explanatory memorandum that accompanied The Excepted Vehicles (Amendment of Schedule 1 to the Hydrocarbon Oil Duties Act 1979) Order 2007 stated that HM Revenue & Customs (HMRC) and industry representatives would establish and publish a code of practice that defines which activities are (for the purposes of red diesel entitlement) regarded as being agriculture, horticulture or forestry.

The resulting document was the Memorandum of Agreement signed in January 2008 by HMRC, the Driver and Vehicle Licensing Agency, the National Farmers' Union, the National Association of Agricultural Contractors and the Confederation of Forest Industries.

The Memorandum states that landscaping and the maintenance of recreational facilities are not agriculture or horticulture. As a result, a tractor cannot use red diesel on the road when undertaking grass cutting/maintenance work at golf courses, playing fields, parks, cemeteries and around industrial, commercial and civic buildings that do not border public roads. A tractor can, however, undertake grass management work when the grass is being cultivated for harvesting as fodder.

Mowing machines
The 'mowing machine' excepted vehicle category does not place limitations on what the mower can do. Consequently, any vehicle which is a purpose-built mower used exclusively for mowing qualifies to use red diesel regardless of the type of grass cutting it undertakes or its use of the public road. A tractor with mowing equipment attached is not a purpose-built mower. It does not, therefore, qualify in the mowing machine category and only qualifies in the tractors category when undertaking qualifying work.

Any type of utility vehicle with removable mowing machinery is not a purpose-built mower. However, a vehicle consisting, for example, of a Land Rover chassis with permanently fixed grass cutters, designed and constructed for grass cutting and used solely for that purpose, would qualify in the mower category.

Link

HMRC 42/08