LPG at 5% VAT

[Deleted member 967]

We all know I presume that LPG can be obtained from Calor Gas Ltd main depots and Countrywide Farmers at 5% VAT (domestic rate for heating and refrigeration) by opening an account with them.

I have today had my first success with a garage forecourt. We called at Grizebeck Filling Station in the south lakes. I asked if we could get the LPG at 5% vat and he said he had had numerous requests from motorhome users.

I showed him correspondence I have had with HMRC on this matter and he supplied us at domestic rate, so I saved about £6 on a tank full. (0.655 litre instead of forecourt price 0.749 litre)

Well worth noting this location as he says most of his LPG sales are to Motorhome users. He is also now looking into supplying without road fuel excise duty.

John

 

[Smaug]

I presume you are not using the LPG for fuelling the engine then?

I get red diesel from a Canal Chandlers & I can get it much cheaper for heating/ generating purposes, but if I want it for propulsion of the boat I have to declare & pay duty. For boats with mixed use a general assumption of a 60/40 split is used for calculating duty.

 

[Deleted member 967]

I presume you are not using the LPG for fuelling the engine then?

I get red diesel from a Canal Chandlers & I can get it much cheaper for heating/ generating purposes, but if I want it for propulsion of the boat I have to declare & pay duty. For boats with mixed use a general assumption of a 60/40 split is used for calculating duty.

Thanks Smaug

Yes it is for domestic use not propulsion. I have correspondence with HMRC regarding the fuel excise duty and VAT.

Bio Diesel users for domestic heating use have to pay the duty on delivery but can claim the duty back from an office in Newcastle upon Tyne. I have been asking why we as Motorhome domestic users of LPG cannot also use the same or a similar scheme. They have to pay the duty because the supplier cannot separate the users of the oil for propulsion or domestic use. They self declare and are refunded. I feel the we are in the same position but so far they will not look at a similar scheme but quote

CUSTOMS, INTERNATIONAL TRADE &
EXCISE ENQUIRIES
Crownhill Court
Tailyour Road
Plymouth
PL6 5BZ


Date 12th April 2012
Our Ref IT12-77299

Dear Mr Thompson

Your letter of 19th March, addressed to the Mineral Oils Reliefs Centre in Gosforth, has been passed to this office.

Let me refer you to our public notice no.76, "Excise duty on gas for use as fuel in road vehicles". It is available on our website HM Revenue & Customs: Home Page. Click on "library" in the "quick links" box on the home page; then "publications", "notices", "excise duties" and finally, "oils/public notices".

Para.2.2 states
"If a road vehicle carries gas-powered equipment (for example, refrigerating apparatus or an exhaust gas purifier) the gas for such equipment is liable to duty if it is drawn from or connected to a supply which is also used to propel the vehicle, even though such equipment does not contribute to the propulsion of the vehicle. Gas for use in such equipment is not liable to duty if it is drawn from an independent supply.

Gas is not chargeable with Excise duty if it is usedJor heating.or for industrial or scientific purposes." -
When gas is not set aside or used as a road fuel it is not liable to excise duty and should be bought from a supplier as such with VAT at 5%. It is for this reason that no scheme is in place to allow recovery.

It's easy to understand why a supplier would charge excise duty. There is at first sight the potential for the gas to be used to power the vehicle and a supplier will be wary of undercharging duty/tax.

You can draw a supplier's attention to the public notice and emphasise that your intended use is for heating/cooking and not for powering the vehicle. If necessary you might offer to provide the supplier with a written declaration in which you state your intended use. This would be something that the supplier could retain as evidence in support of a supply free of duty. Any officer of HMRC that examines the supplier's accounts would thus be able to satisfy him/herself that a supply was legitimately made without duty and with VAT at the
reduced rate."

Yours sincerely,
Robert White

When I produded this letter the owner of the filling station at Grizebeck was happy to supply at 5% VAT. He is now looking at supplying without the "Road Fuel Excise Duty" if he can as most of his LPG trade is Motorhomes.

I have not yet had any success with FloGas and Shell have refused point blank to even consider it. I sent the letter to Calor and I am still awaiting a reply. I do get the gas at 5% VAT from Calor Gas Ltd but still have to pay the "Road Fuel Excise Duty", which currently is £0.3161 per kg (15.85p per litre) rising to £0.3734 per kg (18.67p per litre) on 1st August 2012.

In a further letter Mr White stated that HMRC "understand our frustration, but would not get involved" and it was up to us to negotiate with the suppliers for the supply without "Road Fuel Excise Duty" and VAT at the domestic fuel rate of 5%.

John

 

[Smaug]

I have a bulk LPG tank for C/H & cooking in my house, and I have often considered the idea of getting a bulk tank (or refillables) in the M/H & filling from a dedicated supply point at home. I just suspect that there will be so many "official", "insurance" & "safety" hurdles that it may not be practical. I can just see HMRC coming round to see if any of my cars have been converted to LPG.

 

[philipe28]

VAT & Excise Duty.

Have I got this right?

The excise duty, soon to be, 18p per litre and the Vat at 5% and not 20%.

Quick fag packet calc. Our system is comprised of a 11kg & a 7kg bottle = 18 kg which appears to be approx 36 litres in total.

At say £0.70 p per litre VAT saving £3.15

Duty 36 litres x £0.18 = £6.48

Total saving per fill = £9.63

Is correct?

Phil.

 

[fishy & Nina]

We all know I presume that LPG can be obtained from Calor Gas Ltd main depots and Countrywide Farmers at 5% VAT (domestic rate for heating and refrigeration) by opening an account with them.

I have today had my first success with a garage forecourt. We called at Grizebeck Filling Station in the south lakes. I asked if we could get the LPG at 5% vat and he said he had had numerous requests from motorhome users.

I showed him correspondence I have had with HMRC on this matter and he supplied us at domestic rate, so I saved about £6 on a tank full. (0.655 litre instead of forecourt price 0.749 litre)

Well worth noting this location as he says most of his LPG sales are to Motorhome users. He is also now looking into supplying without road fuel excise duty.

John

Hi John,

I didn't realise that Calor main depots could supply - can you confirm that they have the necessary connections for a Gaslow installation please?
WE have some friends who have just arrived in Shetland only to find out that the only garage supplier no longer sells LPG. He did recommend the Calor Depot, but as they are still heading North from the main island ( and don't need gas yet) it may enable them to stay a bit longer with surety of supply. (I only got the call from them yesterday so this could be very timely........

Thanks in anticipation
ian

 

[Deleted member 967]

Hi John,

I didn't realise that Calor main depots could supply - can you confirm that they have the necessary connections for a Gaslow installation please?
WE have some friends who have just arrived in Shetland only to find out that the only garage supplier no longer sells LPG. He did recommend the Calor Depot, but as they are still heading North from the main island ( and don't need gas yet) it may enable them to stay a bit longer with surety of supply. (I only got the call from them yesterday so this could be very timely........

Thanks in anticipation
ian

Hi Ian

It is the Main Calor Gas Ltd depots with Autogas pump that can do it. All Calor outlets are not Calor Gas owned many are franchised operations. Calor require you to open an account with them and declare that LPG is for domestic not propulsion purposes. Contact Calor head office if you have any problems.

We were advised by the accounts manager at Calor on Teesside to ask everytime wherever we fill up as they may be willing to supply at 5% VAT. All it takes is for them to change the VAT code on a till. The letter from HMRC helped with this.

Contact Mr White at HMRC and ask if he will let you have a similar letter. I forgot to put the reference in the first post. It is Date: 12th April 2012 Our Ref: IT12-77299

John

 

[fishy & Nina]

Hi John,

Thanks for the all the info on this, I will be in touch with Mr White this week.

I will also email my friends up north with the hope that it is a main Calor depot.

Thanks again
ian

 

[Deleted member 967]

Have I got this right?

The excise duty, soon to be, 18p per litre and the Vat at 5% and not 20%.

Quick fag packet calc. Our system is comprised of a 11kg & a 7kg bottle = 18 kg which appears to be approx 36 litres in total.

At say £0.70 p per litre VAT saving £3.15

Duty 36 litres x £0.18 = £6.48

Total saving per fill = £9.63

Is correct?

Phil.

Hi Phil

The figures are taken from the HMRC.gov.uk website

This site has the rates
http://www.hmrc.gov.uk/budget-updates/march2011/fuel-duty.pdf


This site has VAT Public Notice 76
HM Revenue & Customs


VAT is only 5% for fuel used for domestic heating and refrigeration as you can see in the VAT Public Notice 76

John

 

[Deleted member 967]

I have a bulk LPG tank for C/H & cooking in my house, and I have often considered the idea of getting a bulk tank (or refillables) in the M/H & filling from a dedicated supply point at home. I just suspect that there will be so many "official", "insurance" & "safety" hurdles that it may not be practical. I can just see HMRC coming round to see if any of my cars have been converted to LPG.

I know of one member that has none this. He has an LPG pump that can be attached to his bulk tank.

John

 

[Smaug]

I know of one member that has none this. He has an LPG pump that can be attached to his bulk tank.

John

Yes, that's what it would need, as it has to be connected at he High Pressure side of the regulator. I shall have to make some enquiries. It could be worth going to refillables or a built-in bulk tank in the long term, but I only use a few bottles a year even if I include the barbie & boat use!

 

[Deleted member 967]

Yes, that's what it would need, as it has to be connected at he High Pressure side of the regulator. I shall have to make some enquiries. It could be worth going to refillables or a built-in bulk tank in the long term, but I only use a few bottles a year even if I include the barbie & boat use!

I use about 1000 litres a year so any reduction in VAT and hopefully Road Fuel Excise Duty will make a big difference to my annual expenditure on LPG.

The pump I saw fitted into the input side of the tank (The ACME thread that the tanker driver uses to deliver the gas to the tank. The regulator side is picking up gas not liquid LPG. You need the liquid in the bottle or tank. LPG expands 600 times its liquid volume when it turns to gas.

John

 

[fishy & Nina]

Hi John,

I didn't realise that Calor main depots could supply - can you confirm that they have the necessary connections for a Gaslow installation please?
WE have some friends who have just arrived in Shetland only to find out that the only garage supplier no longer sells LPG. He did recommend the Calor Depot, but as they are still heading North from the main island ( and don't need gas yet) it may enable them to stay a bit longer with surety of supply. (I only got the call from them yesterday so this could be very timely........

Thanks in anticipation
ian

Update
Am waiting for a phone call from C & E at end of week.
Have emailed Calor - no response yet.
Emailed Countrywide - already have an application pack!

NO CONNECTION FOR GASLOW / AUTOGAS TYPE SYSTEM ON SHETLAND - after sending the info to my friends who are there at the moment, they made the appropriate phone call to the main Calor dealer in Lerwick.

ian