Red diesel tax treatment vital, says UFU

Thursday, 5 March, 2020

Ulster Farmers’ Union (UFU) deputy president, Victor Chestnutt, says a lower rate of fuel duty for red diesel must continue if farming businesses are to remain competitive.

Speaking in advance of the budget, he said UK farming unions had been assured by successive governments that red diesel exemptions would remain. He warned that with farm incomes and finances precarious, this is essential.

“Red diesel powers the majority of agricultural vehicles and is crucial for farm businesses and food production. The lower fuel duty recognises this reality. Farmers are facing into a period of massive uncertainty and rising costs. The last thing they need would be any moves by government that would drive up costs,” he said.

Mr Chestnutt said any changes to the tax treatment of fuel under the guise of tackling climate change would be deeply unfair and would leave farmers at a competitive disadvantage to other countries. He said any change would be on top of falling incomes, rising costs, weather problems and constant pressure on farmgate prices.

“The UK already imposes one of the higher fuel duty rates in the EU. Eliminating the red diesel tax rebate would increase costs by almost 50 pence a litre. This would hit every farmer and every farm business. Unlike those who can reduce fuel costs by buying smaller cars, that is not an option for farm machinery. This would be a straight attack on already weak or non-existent profitability. Overnight it would make farmers less competitive against their counterparts in the EU or even the US and Canada, where all governments rebate farm fuel taxes,” said Mr Chestnutt, adding that there were no fuel options than diesel on the radar for farm vehicles.