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BOAT FUEL ROW: HMRC BACKS DOWN OVER RED DIESEL RULES AFTER PROTESTS

 
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HM Revenue & Customs has moved to reassure boaters over a controversial announcement on boat fuel.

It told representatives of the RYA and the British Marine Federation on Monday it will change a planned declaration boaters are required to sign when buying fuel.


 

In a a Commons statement last month Chief Secretary to the Treasury Chloe Smith MP said from April boat owners buying fuel would have to sign a declaration saying the red diesel would only be used in UK waters. This appeared to differ from proposed legislation being brought in under pressure from Brussels and led to strong protests from boating organisations.

But at a meeting boating and industry representatives were told the declaration will not now demand such assurances from skippers.

A statement afterwards said: " The meeting was positive and the RYA and BMF can now report that HMRC has confirmed that the Government has no intention to make it unlawful for red diesel bought in the UK to be used outside UK territorial waters.  

"HMRC has also confirmed that the wording of the legislation and the declaration that boat users will make at the time of purchase will be amended to reflect this. The RYA and BMF are confident that their concerns over the proposed declaration will be addressed when the consultation has closed." 

Consultation on the planned changes finishes later this week (March 11th). More details on the HM Revenue and Customs website.

The RYA's Gus Lewis said: “The proposed revised wording for the declaration was unacceptable and we are pleased that HMRC has recognised our serious concerns. We have proposed to HMRC alternative wording that we believe would avoid boaters having to acknowledge falsely that they are aware of restrictions on fuel usage that do not exist.”  

BMF's Howard Pridding commented, “We have worked with the same officials at HMRC for many years on this issue, who understand the importance to the industry and their customers of the continued availability of red diesel.  We have worked constructively ... to find a way forward. "

Background to the row:

The minister's statement appeared to cause problems for skippers filling with fuel in this country and sailing abroad. 

The RYA drew up a Q&A list after, like us, receiving hosts of queries about the situation. Details can be found HERE. Further information was been issued at the end of last week. Read it HERE

Gus Lewis of the RYA earlier said: "The crux of the matter lies with the proposed change to the legislation and not with the Ministerial statement, which is wholly misleading and inaccurate and has caused a vast amount of confusion.

"The current legislation ....only applies within UK territorial waters. It neither permits nor prohibits UK boaters from using duty paid marked ‘red diesel’ outside UK waters and the proposed amendment would not change this.

"The RYA has challenged the proposed revised content of the declaration in the strongest terms and has made it quite clear to HMRC that we are outraged at the inaccurate suggestion by the Minister that our members might not be permitted to use red diesel in international waters."

Red 'dyed' diesel is tax free for commercial use – and was formerly for pleasure craft too.

But under pressure from the EU the last Government brought in rules that saw tax levied on the fuel when used for powering private leisure boats although the same fuel used for heating and cooking continues to be tax free. Skippers presently sign a declaration at the pump specifying the percentage for each use.

But the European Commission has continued to press for an all-out ban on the fuel for private craft.

The HMRC spokesman said last month: “This is a compromise we have agreed with the EC. There was the possibility that if they continued to press  action through the courts there was the possibility that white diesel only would have to be used everywhere. By doing it this way it will still allow users to benefit from the [tax] rate for domestic use on board.”

The RYA said at the time : “There is no legal prohibition on the use of red diesel propelling private pleasure craft in international waters but the proposed amendment to the declaration to be made when buying fuel gives the impression that there is.”

Read original Commons statement

Story updated March 5th 2012

   
       
     


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