| There's bad news for pleasure boaters in the | | | | fuel for domestic use. |
| UK as the Government makes known its verdict | | | | |
| on Red Diesel's future. | | | | Following that consultation process, HMRC |
| | | | will produce comprehensive guidance. |
| But first... | | | | |
| | | | 'Our main concerns were availability and |
| What is Red Diesel? | | | | safety,' said Neil Northmore, the RYA's |
| | | | government affairs adviser. |
| Up until now, UK leisure boaters have been | | | | |
| able to fuel their boats with red diesel | | | | 'We were aware that there was a danger that |
| which is subject to lower VAT. Coloured with | | | | some retailers in more remote areas would |
| red dye to distinguish it from the more | | | | simply not bother selling to pleasure boats |
| expensive variety, red diesel is typically | | | | on the premise that it would be more trouble |
| available for around 40p per litre, less than | | | | than it was worth to distinguish between |
| half the national average for diesel on the | | | | private and commercial craft, and then |
| forecourt. | | | | process the paperwork.' |
| | | | |
| The issue. | | | | Increase in duty. |
| | | | |
| In recent years, permission to use red diesel | | | | Howard Pridding, executive director of the |
| became subject not only to national approval, | | | | BMF said: |
| but also the EU's. The reason is down to EU | | | | |
| policies that bring into line taxes on fuels | | | | 'We are pleased with how HMRC has managed the |
| and energy, and the fact that consent to use | | | | consultation process and the position that |
| red diesel depends on exemption (derogation) | | | | they have finally adopted. When buying fuel, |
| from these EU rules. | | | | people will be required to sign a declaration |
| | | | that states whether their boat is for private |
| The Royal Yachting Association (RYA) fought | | | | or commercial use.' |
| to extend the derogation that allowed UK | | | | |
| leisure boaters to use lower duty red diesel. | | | | It will then be up to HMRC whether they wish |
| In October 2006, the British Government | | | | to investigate whether the purchase was |
| decided to support the case. However, EU | | | | correct or not, he explained. |
| officials failed to accept the government's | | | | |
| arguments and have decided that the | | | | The Future of Red Diesel. |
| derogation should end with effect from the | | | | |
| end of December 2006. There is now a grace | | | | On 28 February 2008, HM Revenue & Customs |
| period in force for the phasing out of red | | | | revealed that from 1 November this year, |
| diesel in the UK. In pleasure craft, red | | | | boaters will be paying a duty rate of 56.94 |
| diesel will remain usable legally until | | | | pence per litre, instead of the current rate |
| November 2008. | | | | of 9.69 pence per litre. |
| | | | |
| Honesty is the best policy. | | | | Boaters will be forced to keep records of all |
| | | | diesel purchases, as it will become a |
| Now the RYA and the British Marine Federation | | | | criminal offence to have diesel on board for |
| (BMF) say Her Majesty's Revenue and Customs | | | | propulsion that you cannot prove was bought |
| (HMRC) has decided private users can continue | | | | at the higher rate of diesel. |
| to use marked fuel (red diesel) provided they | | | | |
| make a simple declaration to the supplier and | | | | Diesel bought for use as heating fuel will |
| pay the full duty rate for heavy oil. | | | | still be available at a rebated rate. So to |
| | | | add further complication, there will be a |
| The Registered Dealer in Controlled Oils | | | | system in place where you can declare that a |
| (RDCO) will then be responsible for declaring | | | | proportion of the diesel you are taking on is |
| the duty collected to HMRC. What makes the | | | | for 'domestic purposes'! |
| situation less clear is that fuel which is | | | | |
| intended for domestic use (not for boating) | | | | Only time will tell how this news will hit |
| will still be available at the lower tax | | | | the market, but it's not hard to imagine it |
| rate. | | | | having some impact. |
| | | | |
| 'Availability and Safety'. | | | | regularly publishes boating articles in |
| | | | addition to listing thousands of boats and |
| The HMRC's Dave Fitzgerald confirmed the core | | | | yachts for sale and charter all over the |
| policy had been fixed but that HMRC would be | | | | world. Sign-up to TheYachtMarket's newsletter |
| working closely with the RYA, the BMF and | | | | to get the latest marine news and boats |
| other stakeholders to develop the detail of | | | | delivered to your inbox. |
| the declaration process and apportionment of | | | | |