What is changing
From 18 January 2024 a new fiscal marker, n-butyl phenyl ehther (‘n-BPE’), is being introduced for use in rebated ‘red’ diesel and other rebated fuels. Minor issues with the red dyes used in the colouring substance to improve solubility is also addressed and allows for oil to be used in the manufacture of a concentrated solution containing all of the markers. These changes will come into effect in line with the changes proposed in the United Kingdom.
Who will be affected
The changes will have a negligible impact. Businesses and individuals currently entitled to supply rebated ‘red’ diesel and rebated biofuels. More specifically, it will impact businesses known as registered remote markers who add the designated markers to full duty paid fuel so it can qualify for the rebate, manufacturers of markers for use in fuel marking, and businesses and individuals who sell or use rebated fuel.
The changes will have a very minor effect. The slight increase in the cost of fuel markers is likely to be passed on to customers, but will have a negligible effect on the price per litre.
Why are these changes happening
Under the terms of the Customs and Excise Agreement the Isle of Man Government is required to keep regulations related to hydrocarbon oils the same as those imposed in the United Kingdom.
A new fiscal marker is being introduced in line with other jurisdictions, such as the UK and EU. A combination of markers are added to diesel and specific biofuels subject to a reduced excise duty rate. This includes a marker used across the UK and EU, Solvent Yellow 124, to address laundering of rebated fuel and cross border smuggling.
What is red diesel
Otherwise known as rebated diesel, gas oil, off-road diesel or ‘tractor diesel’, red diesel is a fuel intended for use other than as fuel in road vehicles, and is therefore taxed at a lower rate. Due to its lower duty rate, there are strict legal requirements about when and how it can be used, which is why it is dyed red to help identify illegal use.
For further information, please contact Isle of Man Customs and Excise on +44 1624 648190. HMRC Policy paper is available online.
