Red diesel is given a significant rebate to relieve financial pressure on important industries like agriculture and horticulture. This type of diesel carries less tax than white diesel and can offer considerable savings to those who can legally purchase and use it.

The VAT rate for red diesel is 5% for quantities up to 2,300 litres. However, for quantities exceeding 2,300 litres, the VAT rate increases to 20%. In contrast, white diesel, which is also referred to as DERV, is always taxed at 20%, regardless of the quantity bought.