Knowledge
Fuel fraud – the facts
CROWN OIL RECENTLY OBTAINED DATA FROM HMRC THROUGH A FREEDOM OF INFORMATION REQUEST; THIS REVEALED THAT
UP TO £260 MILLION IN TAX AND DUTY IS ESTIMATED TO BE OWED DUE TO FUEL FRAUD
With as many as 5,821 instances of fuel fraud
uncovered so far since 2016, the crime makes
up as much as 2% of the UK diesel market.
In Northern Ireland, the problem of
petroleum piracy is particularly dominant with
illicit diesel, which makes up around 6% of the
diesel market and costs HMRC an estimated
£40 million in lost duty and VAT.
What’s more, with a system based on
random checks and punishments of just £250,
diesel renegades are emboldened to take their
chances and use cheap, rebated fuel in their
vehicles, cheating thousands of pounds in tax
from the government if they go uncaught.
“WE BELIEVE
CRIMINALS ARE NOW
EXPERIMENTING WITH
PROCESSES THAT CARRY
A RISK OF EXPLOSION AS
THEY SEEK TO DEFEAT
FUEL MARKERS”
According to HMRC’s Freedom of
Information response: “HMRC conducts a
wide range of activities to detect, disrupt and
deter the supply and use of illicit fuel across
the UK. HMRC is taking an increasingly data-
driven, risk-based approach to tackling all
non-compliance, placing greater emphasis
on testing compliance further up the supply
chain. For example, at retail and storage sites,
where we can deliver a greater deterrent and
enforcement impact.”
Penalties In addition to vehicle detections the
figures below include commercial premises
where fuel is supplied and stored and illicit
sites such as fuel laundering plants
Red diesel, bought by those who want to use
it in their vehicles, is subject to a fine of £250.
For career fuel criminals, a £250 fine in the
instance of a random check is a measly sum
to pay when drivers use hundreds of litres of
diesel a week on their journeys.
However, if you are found to knowingly
use or sell rebated fuels for road use, a penalty
of up to 100% of the duty evaded may be
imposed, hitting large-scale fraudsters hard. The number of instances where vehicles
were caught using illicit fuel (not just red
diesel)
Fuel fraud national statistics
The data provided by HMRC shows that since
2016, there have been 5,821 detections of
This laundering plant discovered at Birkenhead in Merseyside is just one of several plants
22 Fuel Oil News | December 2019
fuel fraud offences nationally and although
the number is decreasing, in the 2018-2019
financial year, 1,454 instances of fuel fraud
were recorded. Since the latest financial year
began in April, there have already been 479
instances of fuel fraud. From these, 4,495
vehicles (77%) were found to be using illicit
fuel.
Year
2016-17
2017-18
2018-19
01/04/2019-31/07/19
Year
2016-17
2017-18
2018-19
01/04/2019-31/07/19
Detections
2,041
1,847
1,454
479
Detections
1537
1448
1122
388
Fuel laundering, or red diesel dye removal
is a particularly costly form of fuel fraud, even
if relatively rare – with 37 operations detected
since 2016. In recent cases scammers have had
to repay as much as £6.5 million and £520,000
in duty conned from the government.
“We remain alert to the often dangerous
methods criminals use attempting to remove
the government markers from rebated fuel,
and will continue to work with our multi-agency
partners to tackle, detect and disrupt this
crime,” said Steve Tracey, assistant director,
Fraud Investigation Service, HMRC.
“Given that laundering plants have been
found close to homes and retail sites they have
always posed a serious risk to the public. We
believe criminals are now experimenting with
processes that carry a risk of explosion as they
seek to defeat fuel markers and I would urge
anyone with information about this extremely
dangerous activity to report it to HMRC.”