It
was decided by the EU that red diesel will no longer be available
to recreational boaters. The special exemption that allowed
the UK to charge lower rates of duty on diesel for private
pleasure craft will come to an end on the 31st December 2006.
The RYA and UK government has fought against this, but to
no avail.
The European Union has adopted a Directive
that restructures the taxation of energy products, including
diesel, in order to reduce perceived distortions of competition
between Member States.
At present diesel
fuel for use in private pleasure craft is subject to duty
at 4.22p per litre and to a reduced rate VAT at 5%. The
derogation that allows this reduced duty rate expired on
31 December 2006. From 1st November 2008, marine diesel
will be in the region of £1 a Litre,
from the current £0.60 mark.
What happens now? Well, from the 1st November
2008:-
• Private
users can continue to use marked fuel (red diesel) providing
they make a simple declaration to the supplier and pay
the full duty rate for heavy oil;
• Registered Dealers in Controlled Oils (RDCOs) will be
responsible for declaring the duty collected to HMRC; and,
• Fuel purchased for domestic use (i.e. not for propulsion
of the craft) can continue to be purchased at the rebated rate.
This means that existing outlets can continue
to sell Red Diesel to boat owners after 1st Nov 2008 and
that you can have it in your tanks, however you do need to
ensure that you obtain a suitably endorsed receipt and keep
it for inspection. For vessels with diesel powered heating
systems that run off their main tank, they will still be
entitled to purchase it at the rebated price, but only for
heating. What this will mean to our friends in the Dutch
Revenue service that have already been fining British vessels
with Red Diesel in their tanks, remains to be seen...
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