Consultation on biofuels simplification

HM Revenue & Customs want to reduce the burdens of the biofuels regime for non-commercial producers.

Small producers

We currently register all producers of biofuels. A growing number of these are very small home based producers and it is not cost effective for us to register them all.

We therefore wish to introduce a minimum production level of 2500 litres per annum below which small producers do not need to register.

Large producers – frequency of returns

We also propose reducing the frequency of returns for all but the largest producers from monthly to quarterly. Only about ten producers will remain on monthly returns. The largest producers are those with a production level of above 450,000 litres per annum.

These changes will require some flexibility in circumstances where producers fluctuate at or around the thresholds. We intend to draw on our experience elsewhere in Excise and VAT in dealing with this issue. We will also use our experience in preventing abuse of the requirements for financial gain or commercial advantage.

We are currently consulting on these proposals. If you are interested in taking part in the consultation, or in finding out more about the details of our proposals, see the consultation document-Biofuels: simplification of regulations.

All replies should be received six weeks from the date of issue of this briefing, to the address given in the consultation document.

Issued 5 January 2007.