At Budget 2020, the government announced that it was removing entitlement to use red diesel (off-road diesel) from most sectors, effective from the 1st of April 2022. This, in effect, is a ban on red diesel for many of its current users, making the use of red diesel more restrictive than it is currently. ATF Professional spoke to Danny Chrispin, owner of Chrispin’s Car and Van Dismantlers, a used vehicle parts supplier, dismantler and bodyshop; he voiced his concerns on this matter and the possible outcome on his business and the industry.
Danny, before we discuss the reform to red diesel, can you provide a little background about yourself and Chrispin’s Car and Van Dismantlers?
I started Chrispin’s paint and bodyshop by myself at the young age of 21 back in October 2000. My Dad and brother joined a few years later to help out with the workload as business became increasingly busy.
We got through quite a few salvage vehicles in the early years, but sourcing parts was always the problem; we spent many an hour at Simpson Salvage – now the ‘U-Pull-It’ at York. Often we would forget some parts, especially those little brackets, so having the odd donor vehicle at our site made it easier, more productive and more time-efficient.
But there were always lots of parts leftover, and scrapping the car just didn’t seem right. We looked at selling the parts, but a licence is required for this, so we looked into this and gave it a go; I received my WAMITAB qualification, and in 2008, we got our licence.
We now purchase salvage vehicles, strip them down to their components and sell the parts. We still run from the same site, but we have since expanded by purchasing the site next to us.
The bodyshop still runs, but our main time is spent with the dismantling yard.
You have concerns regarding the changes in the regulations regarding red diesel. Can you explain what these changes are and when they will come into place?
At Budget 2020, the government announced that it would remove the entitlement to use red diesel and rebated biodiesel from most sectors from April 2022 to help meet its climate change and air quality targets.
The tax changes will ensure that most users of red diesel use fuel taxed at the standard rate for diesel from April 2022, like motorists, which more fairly reflects the harmful impact of the emissions they produce. Removing most red diesel entitlements will also help ensure that the tax system incentivises users of polluting fuels, such as diesel, to improve the energy efficiency of their vehicles and machinery, invest in cleaner alternatives, or just use less fuel.
How will these changes affect you personally and the UK vehicle recycling industry as a whole?
We run diesel forklifts, a material handler as well as getting EMR in with their bailer a couple of times a year. We are a small operation, so this extra tax is going to put more pressure on us going forward. As you know, these machines are not cheap to replace, and as there is nothing out there that can give zero-carbon yet, it will be unaffordable to us.
We are a recycling yard that recycles at least 95% of the cars we buy in, and we sell a great quantity of green parts. I think we more than do our fair share. So to take the tax off is of great concern.
Large yards with multiple machines that all have big diesel engines will cost them considerably, and this will either have to be swallowed up or passed on to their customers.
Do you have any figures you could provide to show what effects these changes will have on your operating costs, and will this increase have to be reflected on vehicle purchases and parts sales? Why do you think these changes have been made?
Gas oil intended for use in diesel engine road vehicles, otherwise known as ‘white diesel’ (because it has no marker or dye), has a fuel duty rate of 57.95 pence per litre (ppl). Red diesel is entitled to a rebate of 46.81ppl, giving it an effective duty rate of 11.14ppl. As a small company, we use about 3500 litres a year so as the figures show, the price difference will add extra costs to our company on top of all the other fee increases.
Some sectors will be exempt from the changes; why do you think this is, and do you believe this is fair?
It is not just for our sector, but the construction and frozen food transport market will also lose out. These changes will affect businesses that have any equipment that needs to use diesel-engine-run machinery apart from a few exempt industries, including agriculture, fishing and forestry. I am not sure why these are exempt, but I believe this reform should extend to all related sectors.
We understand things have to change, but as a small company, this is quite a big increase to come at once; if the government must do this, then surely a phased approach over several years would be more beneficial to all sectors involved.
If you would like to know more about these changes, go to www.gov.uk/government
