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The changes regarding red diesel are affecting many throughout the UK, as the Scottish Plant Owners Association (SPOA) demand a face to face meeting with tax chiefs. There are fears in many quarters that the ban on red diesel will cause house prices to rise. Since the ban came into force on 1st April 2022, the construction industry no longer benefits from rebated red diesel. Before the ban, industries who used off-road vehicles like construction, mining, quarrying, demolition, fishing and agriculture could use the cheaper fuel. Now most will pay the standard rate for white diesel, possibly costing them thousands more per year.

This means that inevitably, higher costs imposed on these industries will be passed onto customers. The ban is intended to contribute towards reducing carbon emissions, although the SPOA insists that it in fact offers zero environmental benefits. SPOA president Callum Mackintosh said: “The viability of construction projects is on the line, housebuilding is what keeps a lot of the country going. The bottom line is house prices are going to go up to the point where they are not affordable.”

He went on: “Over the last few weeks and since the Russian invasion of Ukraine, the price of fuel has skyrocketed. We have come together as an industry to reason with the Chancellor to delay the removal of red diesel entitlement for the construction industry.” Mr Mackintosh added: “It has zero environmental benefit, absolutely none, it is a tax grab. Our costs are just being passed on. What we can’t calculate is the loss of business over the next 12 months.”

HMRC however states it has given businesses “a year to prepare” for the new system and points out its net-zero goals. A spokesman for HM Treasury said: “Red diesel accounts for 15m tons of carbon dioxide emissions every year. “Our reforms will mean many organisations will instead need to use diesel taxed at the same rate as that used by ordinary motorists, helping us to move to net-zero by 2050.”

 

 

 

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