In April of this year the government plan to restrict the usage of red diesel in a bid to cut carbon emissions and improve the air quality within the UK. From April red diesel can only be used for agricultural, rail transport and non-commercial heating purposes, but not in the construction industry. Industry sources claim that this could cost construction businesses up to £25 million in total.
Used For All Kinds Of Heavy Equipment
The construction industry uses red diesel, which is basically white diesel which has had red dye added to it, for all kinds of heavy equipment so this will certainly be a blow to them when their costs spike up.
Democratic Unionist Party MP Carla Lockhart has been raising the issue at Westminster and has urged the government to wait until alternative fuel sources are further developed before banning construction businesses from using red diesel. If the government go ahead then it could well lead to higher house prices and the cost of building new roads, hospitals, schools and social housing will also rise.
Retain Evidence That The Correct Fuel Has Been Put Into The Fuel Tank
In a statement which has been published in an article on the BBC News website, the HMRC said that from April onwards:
“You will need to retain evidence to confirm the correct fuel has been put into the fuel tank.
“HMRC will consider what purpose the vehicle or machine was being used for at the time of inspection and whether this was an allowed purpose.” And if vehicles were illegally still running on red diesel they could well be seized.
Energy Prices Showing Significant Rises
With energy prices showing significant rises right now which is badly impacting on all industries, along with increased costs, this new legislation could not have come at a worse time for construction businesses. It is understandable that the government want to cut carbon emissions as swiftly as they can but it may be more prudent to wait until alternative fuels can be properly rolled out before making such as move as this.
If you have a business that is struggling due to rising costs and rising wages, you may need some help in planning how you can work your way through the next few months, and to see if there is any extra funding that is available to you at this moment in time. At WHR Accountants we help many businesses with their taxes, business plans and business funding, so if you would like an initial informal chat with us please give our team a ring on 028 3752 2909.