Red Diesel Rules for Farms
Written and reviewed by the Agricultural Accountants editorial team. Last reviewed 27 July 2026.
In April 2022 the government took red diesel away from most industries, but farming kept it. The confusion since is not usually about the tractor in the field, which is fine, but about the diversified and contracting work a modern farm also does.
The line is drawn by the purpose the fuel is used for, not by who owns the machine.
What Farms Kept
From 1 April 2022 rebated diesel was restricted, but purposes relating to agriculture, horticulture, forestry and fish farming keep the entitlement, as GOV.UK sets out in its guidance on when rebated fuel can be used.
So the ordinary work of the farm, cultivation, harvest, cutting grass, moving stock, is still allowed to run on red diesel. That is the reassurance most farmers are looking for.
Where It Gets Caught
The problems come with work that is not agriculture. Construction, including building sealed roads or putting up structures, is not an accepted purpose even on a farm, and most commercial and contracting work lost the entitlement in 2022. If your farm does groundworks, plant hire or building work on the side, that fuel is a different matter.
A farm doing agricultural contracting for other farms is generally still within the permitted uses, but a farm branching into construction or haulage is not, and mixing the two on one machine is where records matter.