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Costs will rise as vehicles are disqualified for red fuel, say CECA

The Civil Engineering Contractors Association (CECA) has warned that costs will rise as the definition for road surfacing vehicles changes, so far fewer vehicles will qualify for lower taxed 'red' fuel.

The new Her Majesty's Revenue and Customs (HMRC) regulations will come into effect on April 1.

Vehicles losing out will be mainly road-marking vehicles, road sweepers and crash barrier repair vehicles.

"This is because they are either not used in any way connected with surfacing a road, or else have a maximum speed exceeding 20kph," the spokesman said.

Under the new HMRC category of "road surfacing vehicle", vehicles designed only to perform an operation necessary to construct or restore a road, or the surface of a road will qualify.

The vehicles must not carry any load on a public road except what is necessary to propel it, or to operate any machinery built in, or permanently attached to, the vehicle.

But there will be a new category for tar sprayers. A vehicle to qualify for this must be designed and permanently built for the purpose – and unable to carry any load other than its own tar.

Director of CECA (North-East), Douglas Kell, which recently sought clarifications from HMRC, says: "Firms often used the cheaper red fuel rather than white in the past where permissible.

"Anyone not complying with the new regulation could risk prosecution and a fine. Since the alternative white diesel fuel costs around 50p a litre more than the red the additional tax raised will not be tiny. Contractors' costs are sure to rise."

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