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26th May 2005, Page 34
26th May 2005
Page 34
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Which of the following most accurately describes the problem?

The net is closing on the unfair use of red diesel as the Treasury loo

Road transport has always been a cutthroat business — any minor advantage that can be gained over your competitors can make the difference between success and failure. Hence the relationship between agricultural vehicles and the road transport sector inevitably fires a heated debate.

Complex regulations governing the use of vehicles on the roads dictate that the majority of farm vehicles do not have to comply with the same rules as trucks used for hire and reward.

The key differences are that an operating licence is rarely needed; drivers' hours and tachograph rules do not apply when the vehicle is carrying goods within a 50km radius of where it is usually based;and,crucially, they can run on red diesel that carries a fraction of the duty imposed on so-called 'white diesel'.

But for years there have been persistent claims that some operators in the agriculture industry are abusing these exemptions by undercutting hauliers on hire-and-reward work.

Now the row is coming to a head as theTreasury delves deeper into these issues as part of its consultation process on changes to the' excepted vehicle schedule — the definition of which vehicles do not have to meet the terms of the Hydrocarbon Oils Duty Act 1979.

Clearer definition

The review was launched last December; Treasury officials are in the process of gathering evidence from all interested parties. And while the outcome remains wide open, the Treasury has hinted heavily that it could end up with what it calls "a more clearly defined" schedule, that "may lead to fewer excepted categories than at present".

The National Association of Agricultural Contractors (NAAC) has voiced alarm at the consultation, especially in terms of red diesel. It warns that the review has already "struck fear into contractors' hearts" and has been holding meetings with Customs 8z Excise to discuss the impact on its members. It fears that legitimate agricultural contractors will be squeezed if the definitions change dramatically.

The NAAC is adamant that it does not condone the use of red diesel for non-agricultural haulage work, as this robslawabiding HGV operators of revenue. But it wants its members to be judged as "farmers without land" rather than hauliers, with the same rights and benefits as farmers.

According to the Vehicle Operator Services Agency (VOSA) an agricultural motor vehicle is one "constructed or adapted for the purpose of agricultural, horticulture or forestry and which is only used for one or more of those purposes".

If the vehicle is plated to carry over 3,500kg, an 0-licence or a vocational licence may be needed. But any vehicle that fits this description is exempt from road fuel duty if they are used exclusively off-road or use public roads only incidentally. The argument is that they do not contribute to road damage, or require road-related public services, so they should not have to pay in full.

However, the Treasury estimates that fraud involving red diesel deprives it of around £500m pounds a year in lost revenue. It warns: "The lack of clarity surrounding precisely which vehicles are legally entitled to use rebated oil on the road results in real difficulties in distinguishing between legal and fraudulent use, undermining the efforts of enforcement agencies attempting to tackle this revenue loss, "We believe that, in some cases, the current excepted vehicle categories and definitions are no longer fit for purpose. Over recent years there has been growing evidence that certain categories of vehicles using red diesel do not conform to the underlying criteria —that is, they are not vehicles using roads only incidentally. "There is therefore a strong case for considering re-drawing the list of excepted vehicles."

Huge advantage

The difference in fuel duties leads to an obvious temptation for red-diesel users to cash in on their advantage.'The duty on ultra-low-sulphur diesel, the most popular type, is 47.1p/lit. For red diesel it's just 5.22p/lit.

Andrew McMahon,a retired traffic officer and author of Agricultural Vehicles on the Road -A Guide to the Legislation, says the current rules can be interpreted differently by different people. But he believes many agricultural contractors, rather than farmers,should be brought into line."Most of them should have an 0-licence and be operating on white diesel." he believes.

Jimmy Quinn,director of communications for the Irish Road Haulage Association,says the loss of hire-and-reward business to green diesel (the Irish equivalent of red diesel) operating trucks is -an ongoing problem" in a country dominated by a strong farming community: Politicians are talking about an on-the-spot fine system but there's no will to stamp this out.

"We have no problem with farmers using agricultural vehicles for farm-related business. But there are non-farmers who are abusing the rules on a wholesale basis, using tractors that can haul 20-tonne payloads. This problem is becoming bigger and bigger every year and in Eire tractors are even allowed on the motorway. In terms of safety. that's absurd."

The Treasury is also investigating the use of so-called 'super tractors': powerful machines that comfortably travel at up to 50mph.

It says: "These fast tractors are increasingly being used on road to haul agricultural loads that previously would have been hauled by... HGVs,using [normal] diesel.This is resulting in unfair competition with road vehicles." To crack down on the problem, government officials will consider limiting the distance reddiesel-powered tractors can travel,or imposing speed restrictions. They might also draw up a definition of an 'agricultural engine' in a final hid to differentiate between vehicles built for road haulage and those made for farms. • CONTACTS Traffic Law for Farm Vehicles: www.agricultural-vehicles.co.uk/ VOSA definition of agricultural motor vehicles: www.vosa.gov.uk/vosa/privatehgvpsv owners/agriculturalmotorvehicles.htm Do I need an 0-licence?

www.vosa .gov.uk/vosa/ti gvpsvop orators/ hgvoperatorlicensing

For information on the Treasury consultation contact: www.hm-treasury.gov.uk


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