IMPORTANT Diesel Tax changes for boaters!

[craig_c]

Important to note, please voice your concerns to the given email address.

The more ammo we throw at this guy hopefully they will see sense.

ONLY 1 WEEK LEFT to tell the HMRC what we think...

[jwalker]

Originally Posted by craig_c

ONLY 1 WEEK LEFT to tell the HMRC what we think...

What are you going to tell them?

[craig_c]

Originally Posted by jwalker

What are you going to tell them?

Gary Satchell
Excise & Environmental Taxes Policy Design Team
HM Revenue & Customs

I am really worried about the ramifications we will feel if the above proposal is implemented.

The severe increase in fuel costs will markedly reduce the use of personal craft which will reduce the income brought to Coastal and Island communities.

We may have an increase of £200 per tank.

Again I reiterate - This increase will have a reduction in use of boats and devastating effect tourism.

Power Boat production, something we are world leaders, will struggle to find a home market.

According to this directive, red diesel may only be used in the future for heating and must be stored in a separate tank to the white fuel which must be used for propulsion.

Will we require to take out the old fuel tanks which previously held red diesel, fit new untainted tanks. It will be uneconomical to fit separate tanks for our heaters so they will run on white fuel.
The cost and practicality of retro fitting a separate tank for propulsion diesel would be beyond most boat owners

We are now to comply with an EU directive as we leave the EU... This is why we are leaving.

Is it true, even though Brexit is looming, this directive and judgement can still be enforced by the government as part of a leaving agreement or, should Brexit not take place, would automatically be put in place to comply with the EU judgement.

I believe this duty increase will have a devastating impact on Scottish boating – the increase in fuel cost will impact on current boat owners, curtail the use of boats and therefore decrease the tourism spend in restaurants, bars and visitor attractions as boat use declines.

It will also have a catastrophic effect on this country’s marine tourism industry, an industry which is already struggling under spiralling costs.
The high cost to modify private boats to fit a completely separate fuel system to allow owners to run heating systems on red diesel means that it would not be worthwhile, and most marinas will supply only white diesel after implementation which leaves the issue of where to get red diesel in the first place.
The cost implication for marinas to install extra diesel tanks to supply both red and white diesel means that many, particularly in more remote areas of Scotland will only continue to sell red diesel to cater for commercial vessels thereby severely restricting the availability of white diesel for private boaters.
In 2016 the Scottish Marine Recreation and Tourism Survey estimated that marine recreation and tourism is worth £3.7 billion to the Scottish economy alone. This ruling is going to force boat owners to pay full duty and VAT on white diesel for both propulsion and heating and will be the beginning of the end for the industry and make the hobby completely unsustainable for people already struggling to fuel their vessels.
In light of the UK current situation and possibly heading towards a ‘No Deal Brexit’, we believe that the correct thing for the Government to do would be;

Set a date for implementation way beyond the intended departure date from the EU, and then completely abolish the plans to implement this decision on leaving the EU.

Perhaps go even further to stimulate the boating market upon leaving the EU and allow private pleasure boat users to go back to using red diesel at the commercial rate of duty for propulsion and promote sailing and motor boating and allow the industry to grow.

[jwalker]

Craig_C, I'm not sure your £200 extra per tank is a valid argument in most cases. Presently leisure users are (should be) paying full duty plus vat, this will not change if the diesel we buy is white diesel. The cost will be the same. The only significant change is if a boat carries a heater, has a single fuel tank and some duty paid fuel is burned for heating.

[Tim M]

Originally Posted by jwalker

Craig_C, I'm not sure your £200 extra per tank is a valid argument in most cases. Presently leisure users are (should be) paying full duty plus vat, this will not change if the diesel we buy is white diesel. The cost will be the same. The only significant change is if a boat carries a heater, has a single fuel tank and some duty paid fuel is burned for heating.

I’m sure most diesel ribs are fitted with Eberspacher heaters in the console to keep the electrics nice and warm thus allowing red at 60/40. Right? [emoji23]

[Last Tango]

""I'm sure there is a way for you to keep using red if you code, and invoice yourself for each trip.""

And of course, you will have to keep your APB commercial endorsement complete with medical certificate and renewable first aid certs up to date to skipper your own boat on these "commercial" trips.

I'm also guessing you've not been through the horrors and expense of Coding.

[jwalker]

Originally Posted by Tim M

I’m sure most diesel ribs are fitted with Eberspacher heaters in the console to keep the electrics nice and warm thus allowing red at 60/40. Right? [emoji23]

Well mine is...

My understanding is that if the 60/40 was not truly representative of actual fuel usage, one should declare that and pay the appropriate duty...doesn't everyone do that? ....

[ShinyShoe]

I'm not sure Craig_c's argument is helpful. HMRC expects people to complain this will be more expensive.

£200 per fill up - not a typical user - even if you paying only £0.60p currently because you sourced completely untaxed, you could then source road white for £1.30, you are using close to 300 litres... That's not typical pleasure boating. That is pleasure boating for an elite few.

The arguements that I do think stand some chance are:

- availability of white on the quay side (and possibly pointing out that the cost of petrol quay side is disproportionately high compared to road)
- avoiding need to fully flush the system to become free from red
- the need for quayside fuel to turn over to keep fuel big down

You aren't going to win the arguements on payment, because the EU has told them to sort it. Certainly if we no deal there *may* be a rethink on that. But it won't win the eco arguments, but if the government wanted to show how being out of the EU meant we were free to make our own decisions...

I wouldn't hold my breath.

[Poly]

Originally Posted by Last Tango

""I'm sure there is a way for you to keep using red if you code, and invoice yourself for each trip.""

And of course, you will have to keep your APB commercial endorsement complete with medical certificate and renewable first aid certs up to date to skipper your own boat on these "commercial" trips.

I'm also guessing you've not been through the horrors and expense of Coding.

Craig was asking a few weeks ago about the process, costs etc for coding. Still if he thinks he'll be spending an extra £200 per tank it could be worth it.

[beamishken]

I think the argument has to go allong the lines of "when i take my usual months holiday around the north of scotland if I cant run on red & there is no available supply of white then I wont be able to safely get there with my tanks range. Therefore it will mean I wont be spending my usual £500per night on food and berthing etc in this rural area therefore depriving this area of much needed revenue. Alternatively I could chance getting there and back on my tanks range however Im not sure we could make it there and back safely therefore not being allowed to run on red is a possible safety concern."
The treasury realy dont care about what it costs the well healed boater but they may listen if its a safety concern or it financially affects a rural area that needs the income.
On the other hand the Scottish govt has climbed into bed with the green party so I doubt Wee Jimmy Cranky will be stepping forward to help out the owners of gas guzzling stink pots.
Being the owner of a boat that does 1.5mpg my thoughts are that if Brexit doesnt sort the red diesel thing we will just have to dig deeper ( or carry on cheating a little [emoji6])

[Pete7]

Originally Posted by jwalker

Well mine is...

My understanding is that if the 60/40 was not truly representative of actual fuel usage, one should declare that and pay the appropriate duty...doesn't everyone do that? ....

No, most just accept the 60/40 percent on the South Coast as many of the fuel pumps have been set to that automatically. When the system first came in an attendant had to do a calculation and work it out for you. Now pumps are 24/7 and unmanned its take it or leave it. I suppose you could try claiming back the extra duty you paid on the propulsion part but used for heating and cooking, from HMRC. Of course you may have to prove a rib has a diesel cooker or generator.

Originally Posted by ShinyShoe

You aren't going to win the arguements on payment, because the EU has told them to sort it. Certainly if we no deal there *may* be a rethink on that. But it won't win the eco arguments, but if the government wanted to show how being out of the EU meant we were free to make our own decisions...

I wouldn't hold my breath.

Worth mentioning Michael Gove is keen environmentalist, no problem with that, but he is unlikely to fight the corner of big posh gin palaces (and private planes) having a tax cut from road fuel taxation rates.

Pete

[beamishken]

Originally Posted by Pete7

No, most just accept the 60/40 percent on the South Coast as many of the fuel pumps have been set to that automatically. When the system first came in an attendant had to do a calculation and work it out for you. Now pumps are 24/7 and unmanned its take it or leave it. I suppose you could try claiming back the extra duty you paid on the propulsion part but used for heating and cooking, from HMRC. Of course you may have to prove a rib has a diesel cooker or generator.



Worth mentioning Michael Gove is keen environmentalist, no problem with that, but he is unlikely to fight the corner of big posh gin palaces (and private planes) having a tax cut from road fuel taxation rates.

Pete

Using a 60/40 split without actually using 40% for heating is technically illegal as far as the law is concerned However as hmrc don't want the hassle of collecting the tax & the revenue generated wouldnt cover the cost of policing no one realy cares hence the 60/40 becoming the norm.
I spoke to my fuel supplier a few days ago & his take is that the only enforcement that will be taken against anyone once/if white becomes the norm will be putting the onus on the supplier to not supply red fuel to pleasure boats. Clearly if there are no plans to check whats in vessel tanks then my guess is a lot of vessels will carry on using Red anyway

[ShinyShoe]

Originally Posted by beamishken

I spoke to my fuel supplier a few days ago & his take is that the only enforcement that will be taken against anyone once/if white becomes the norm will be putting the onus on the supplier to not supply red fuel to pleasure boats. Clearly if there are no plans to check whats in vessel tanks then my guess is a lot of vessels will carry on using Red anyway

How many red users are using red from a supplier who doesn't know where it is used? There may be a handful who get a delivery to home and transport it to the boat. But the practically is not great. And lots of the "can't use white" arguements are broken if you can bring red to the boat, you can bring white. So why am I paying tax on petrol but diesel owners are not?

If you are a quayside red supplier why would you risk fines for supplying red to pleasure craft on the dockside? The profit will be low. You may have a mate who turns a blind eye on the quay of your local harbour. But you need a network of mates for the big passages...

There won't be many quayside tanks dipped in the UK. Doesn't mean never. Either intelligence led. So if some officious (read: disgruntled petrol user) tax payer complains that XYZ harbour are supplying red to leisure, it would be fairly easy to make life misery for everyone in that harbour by dipping every non-commercial diesel... It would be difficult to justify not doing that.

Then for those who take their boats abroad - dipping does occur. Belgium are obsessed by it! We are about to enter a new world of less free / less easy movement. If countries want to make the point that once you leave the club you loose the rights of being in the club, they are likely to try and make themselves felt...

If it was as easy as the supplier turning a blind eye, I could drive to the garage that sells red at a pump and fill up my car and they would say "not their problem"...

...if I get stopped, then say I buy it from ABC garage - it will be their problem.

[Pete7]

Originally Posted by ShinyShoe

And lots of the "can't use white" arguements are broken if you can bring red to the boat, you can bring white. So why am I paying tax on petrol but diesel owners are not?

If they are buying it off a farmer then it's probably not legal and you have a fair point. If they are buying it from a marina then they are paying tax, a higher rate for propulsion and a lower rate as we do for diesel heating at a lower tax rate. I think the heating tax rate is about 5% similar to oil central heating for a house.

Originally Posted by ShinyShoe

Then for those who take their boats abroad - dipping does occur. Belgium are obsessed by it! We are about to enter a new world of less free / less easy movement. If countries want to make the point that once you leave the club you loose the rights of being in the club, they are likely to try and make themselves felt...

That would be a good reason to switch to white for boats which might cross to Europe at some point in the future. It is going to take a few tank fulls to clean out the red.

Interestingly my diesel rib ran better, cleaner and faster on French supermarket white diesel compared to UK red.

Pete

[jwalker]

Originally Posted by pete7

...most just accept the 60/40 percent on the South Coast as many of the fuel pumps have been set to that...

Pump, is that a south coast thing? ... It's usually just a tank plus gravity where I go boating.

[Nos4r2]

Originally Posted by Pete7

Interestingly my diesel rib ran better, cleaner and faster on French supermarket white diesel compared to UK red.

Pete

I'm not surprised. I've seen the shit that gets pumped into red diesel, plus (certainly where I came from) it's unadditised.

When I used to drive the tankers that supplied it, we used the gas oil tanks in the yard as somewhere to dump all the kero/white/red/bio slops.

[ShinyShoe]

Originally Posted by Pete7

If they are buying it off a farmer then it's probably not legal and you have a fair point. If they are buying it from a marina then they are paying tax, a higher rate for propulsion and a lower rate as we do for diesel heating at a lower tax rate. I think the heating tax rate is about 5% similar to oil central heating for a house.

This is my point though...

In one breath we are told that it will be impossible to leave harbour because it only has a red pump and bringing white in by cans is just impossible. In the next we hear of someone who buys it from a farmer... So it's not impossible if it saves 40p a litre?

[Pete7]

Originally Posted by ShinyShoe

This is my point though...

In one breath we are told that it will be impossible to leave harbour because it only has a red pump and bringing white in by cans is just impossible. In the next we hear of someone who buys it from a farmer... So it's not impossible if it saves 40p a litre?

Who said it is impossible? having done the can thing, I would prefer not to.

Buying it from a farmer at a fraction of the price in a marina is understandable, but it isn't being taxed at the correct rate. At half the price morals could be overlooked by some folk.

Make it all white and those who have a legitimate reason to use lower taxation fuel claim the extra duty back. The onus is on them proving the need to HMRC by having a legit business etc.

Anyone want to buy 60L of red diesel going cheap in Gosport?

Pete

[beamishken]

Originally Posted by Pete7

Who said it is impossible? having done the can thing, I would prefer not to.

Buying it from a farmer at a fraction of the price in a marina is understandable, but it isn't being taxed at the correct rate. At half the price morals could be overlooked by some folk.

Make it all white and those who have a legitimate reason to use lower taxation fuel claim the extra duty back. The onus is on them proving the need to HMRC by having a legit business etc.

Anyone want to buy 60L of red diesel going cheap in Gosport?

Pete

Making everyone else run on white and reclaim the duty is a massive undertaking & open to far greater fraud that what could possibly go on with the odd boater who fills up with red diesel. I think the level of tax evasion from people running red instead of white will depend largely what region you boat in and the ready availability of white fuel

[ShinyShoe]

Well since Craig says this will cost £200 more per fill, even if we assume he pays no duty currently (tut tut) - he is filling with 300litres. That is hard work by hand!... And in a remote port where the garage isn't close by probably impossible.

But if people are bringing red in for significant quantities they can do the same in white...