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Red Diesel Consultation About to Close - get your comments in.


Alan de Enfield

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The consultation period on reforms to the tax treatment of red diesel and other rebated fuels, announced in the March 2020 budget, closes on 1st October.

Users of off-highway construction machinery currently pay tax of just 11.14 pence per litre on diesel instead of the standard tax rate of 57.95 pence per litre. The subsidised diesel is dyed red purely to distinguish it from the standard rate fuel.

 

Here is what the construction industry are saying :

 

https://www.theconstructionindex.co.uk/news/view/red-diesel-consultation-deadline-looming

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To remond boaters again -

Apart from my view that the tax on fuel was / is hypothecated  = designed to fund roads and it's dishonest (at the least) to shift that across for other use of Gas Oil 9 = Diesel)

 

For boaters there is a considerable risk that some canalside retailers will no longer sell the fuel because of the higher risk of theft and the greater cost of stocking it.

If you are of the opinion that it's 'tax' and we all must pay it, it's worth pointing out in the consultation that some provision should be made to protect canal and riverside fuel supplies and suppliers.

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7 minutes ago, OldGoat said:

I'm obliged

(I assumed that ports have huge and well secured bunkering facilities - hence supply may not be an issue??)

The marina I am 'in' has what looks like a domestic green plastic 'tank' mounted above ground. (The same as household Kerosene tanks).

No security.

 

I'm sure the 'commercial ports' will have huge, secure tanks, the the smaller marinas - no.

When we went into Port St Mary (IoM) we had to phone for a tanker to come down onto the harbour wall as the boat club did not have 800 litres 'to spare'.

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Not sure how I can comment?

I keep a record of my usage, and do the split in retrospecr, so far, since cc ing, I reckon I have used 140 litres, but only done 90 engine hours, and some of that heats water for domestic use, so a 60:40 split by the looks of things, the lockdown, and now the 'lock in' has contributed, but if I can only use white diesel, it's going to make a big difference, and I really don't think it is practical to fill up with jerry cans.

Have the CRT or the IWA a d the dedicated  suppliers like marinas and fuel boats done any lobbying?

Edited by LadyG
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If thieves  were going to steal fuel why would they be worried about its colour? 

The marina where I  keep my boat sells petrol. I don't believe any of it has been stolen. So why would white diesel  be any more subject to theft?

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19 minutes ago, MartynG said:

If thieves  were going to steal fuel why would they be worried about its colour? 

The marina where I  keep my boat sells petrol. I don't believe any of it has been stolen. So why would white diesel  be any more subject to theft?

 

The storage regs for petrol are much more severe, whilst for diesel you can use any bunded above ground container you like.

 

Diesel is not classed as 'very dangerous' and why you can store 1000's of litres at home, or in cans in the back of a van (at one marine we were in - Hull - a boated had a couple of the 'wire-caged' 1000 litre containers in the back of his van, he'd go and fill up at the agricultural diesel supplier, pull up on the quay side and siphon it into his boat)

With petrol the maximum you can carry in a vehicle, or store at home is 30 litres.

 

It is very simple for 'less desirables' to break off the padlock on an above ground tank and fill up a few cans than it is to access underground tanks and somehow pump it out.

It is a fairly common occurrence for farmers to find their diesel tank stop-tap / padlock smashed off and whatever the 'gypos' couldn't get in their cans left to flood the 'yard'.

 

 

 

https://www.hse.gov.uk/fireandexplosion/petrol-storage-club-association.htm

 

You can store up to 30 litres of petrol at home or at non-workplace premises without informing your local Petroleum Enforcement Authority (PEA).

You can store it in:

suitable portable metal or plastic containers

one demountable fuel tank

a combination of the above as long as no more than 30 litres is kept

For these purposes 'premises' are as defined in the Health and Safety Work Act, etc. 1974 and includes, for example, motor vehicles, boats and aircraft.

 

What containers can I use to store petrol?

The legislation allows you to store petrol in the following containers:

plastic containers storing up to 10 litres

metal containers storing up to 20 litres

demountable fuel tank up to 30 litres

Suitable portable containers are defined in Schedule 2 (para 6) and Schedule 3 of the regulations. UN approved containers are an example of such containers.

More detailed information on portable petrol storage containers (PDF) - Portable Document Format is available.

 

Does the petrol in the fuel tank of my car count towards the total I can store?

No – the petrol in the fuel tank of your vehicle, including boats and aircraft, does not count when you are calculating the total amount you are storing.

How much petrol can I store on a vehicle?

You can store up to 30 litres of petrol in a maximum of 2 suitable containers in your vehicle.  For the purpose of these Regulations a ‘vehicle’ is interpreted as any type of vehicle so includes boats, aircraft and hovercraft. This type of storage counts towards the total you can store at non workplace premises. Carriage of petrol is covered by the Carriage of Dangerous Goods (CDG) and the European agreement (ADR).

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7 minutes ago, Alan de Enfield said:

 

It is a fairly common occurrence for farmers to find their diesel tank stop-tap / padlock smashed off and whatever the 'gypos' couldn't get in their cans left to flood the 'yard'.

That is  evidence the thieves don't care what colour the fuel is.

 

 

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Regardless of any fears about theft it seem already decided by the UK government that white diesel  at full duty price will be the fuel we will be buying for use  in boats starting 1st April  2022.

 

Whether any economic pressures will delay that date remains to be seen. 

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23 minutes ago, MartynG said:

Regardless of any fears about theft it seem already decided by the UK government that white diesel  at full duty price will be the fuel we will be buying for use  in boats starting 1st April  2022.

 

Whether any economic pressures will delay that date remains to be seen. 

In reality it will make very little difference to boaters who have been doing accurate declarations (or even 60/40)

 

The Governments proposal is to retain the 60/40 split, 'we' have already been paying full duty on the propulsion fuel and getting rebate on the 'domestic fuel so what will change ?

 

The only change I can see is that the marina's are likely to look to increase security as white diesel is more attractive to the scrotes, this is unlikely to be just a bigger padlock or a higher fence and is possibly going to underground storage.

 

This will probably / certainly affect the price at the pump as the investment will need to be recouped.

 

Have you read thru the consultation documents ?

 

 

 

Private pleasure craft

 

5.30 Private pleasure craft users are currently entitled to use red diesel for both propulsion and non-propulsion use, but they have to pay white diesel rates for the fuel used for propulsion.

 

5.31 At Budget 2020, the government announced that it would include enabling legislation in Finance Bill 2020 to prohibit the use of red diesel to propel private pleasure craft, with details on the implementation of this power to be set out in due course. This will achieve consistency with a 2018 judgment by the Court of Justice of the European Union (CJEU) and ensure the UK meets its international obligations. It will not change private pleasure craft users’ entitlement to use red diesel for non-propulsion uses. The Bill is currently before Parliament.

 

5.32 Once the power is implemented, private pleasure craft users will need to use white diesel for propulsion instead of red diesel. This will not affect the fuel duty rate they pay on fuel used for propulsion since they are already paying the standard white diesel rate for this use of fuel.

 

5.33 However, implementing this judgment will create significant difficulties for some craft users and fuel suppliers according to the responses they provided 25 to the 2019 HMRC consultation on the use of diesel for propelling private pleasure craft. The government response to this consultation has also been published today, which includes a summary of responses.

 

5.34 The government is continuing to work with craft users and fuel suppliers to understand how they will implement the changes once they enter into force, taking account of the issues raised in last year’s consultation. It also needs to understand what impact the wider changes to red diesel entitlements may have on implementing this change for private pleasure craft.

 

5.35 Following discussions with craft users and fuel suppliers during the consultation, the government will decide when to remove the entitlement to use red diesel for propulsion, and will set out further details in due course.

 

5.36 Regardless of when private pleasure craft users need to start using white diesel for propulsion, they will remain entitled to use red diesel for nonpropulsion uses, such as for heating, and lighting and powering appliances such as fridges via a battery charged using red diesel (provided they have a separate fuel tank for this purpose). If they have only one fuel tank on board their craft, they will need to use white diesel.

 

5.37 As committed to at Budget 2020, the government has been exploring options to prevent users of private pleasure craft with only one fuel tank on board for propulsion and non-propulsion having to pay a higher rate of duty on their non-propulsion use of diesel than they currently pay.

 

5.38 The government is considering introducing a new relief scheme where approved fuel suppliers would be able to deduct from the sale price the duty difference on the proportion of white diesel intended for non-propulsion use. The fuel suppliers would then reclaim this deducted duty from HMRC and reflect this in the price charged to the private pleasure craft user at the point of sale.

 

5.39 Analysis by both the industry and HMRC previously suggested that a split of 60% for propulsion and 40% for non-propulsion use probably reflected most crafts’ typical fuel use. The government would welcome views on whether this apportionment remains typical, with supporting evidence.

 

5.40 The government would also welcome views on whether the relief should be a fixed percentage or whether it should be capped at a maximum percentage. A fixed percentage would mean a written declaration from craft users of how they use their fuel would not be required and it should make it slightly easier for fuel suppliers to work out the duty that needs to be deducted from the sale price and compile all the claims for HMRC. A relief capped at a maximum percentage would allow craft users to more accurately reflect the amount of diesel they intend to use for non-propulsion. This would necessitate a written declaration from the craft user to the fuel supplier on how they intended to use each tank of fuel (which would need to be made available to HMRC on request), although craft users could lodge a standing declaration with any supplier where they were a regular customer to save them making new declarations each time they refuelled.

 

5.41 The government would welcome views on the overall approach and whether fuel suppliers foresee any difficulties with implementing this scheme. If the 26 government decides to proceed with the introduction of this relief scheme, more guidance on how it will work will be set out in due course.

 

5.42 It is the government’s intention that people whose primary, or often their only, place of residence is their boat (which has a permanent mooring), will remain entitled to use red diesel. The government will set out what requirements these boat users need to provide to justify a continued use of red diesel, even if their craft has only one fuel tank.

 

5.43 The government believes that only a small proportion of private pleasure craft have a separate tank for non-propulsion use only. Given the small number of these craft, the government is minded to maintain their entitlement to use red diesel in the non-propulsion tank, but it will require them to use white diesel for propulsion use. If the government introduces the relief scheme set out above, these users will not be allowed to reclaim from their fuel supplier the duty differential between white and red diesel on the amount of red diesel used for non-propulsion, as this will already have benefited from the rebated rate of duty. However, if the relief scheme is introduced, those using white diesel in their non-propulsion tank will be able to reclaim the duty difference on the white diesel used for non-propulsion, as set out above.

 

5.44 Like for other end users of red diesel, the government does not propose to mandate that private pleasure craft users have to flush out their tanks to remove traces of red diesel when these changes come into force. However, it expects them to ensure that they do not purchase red diesel for use from the date that it is banned (except for a separate non-propulsion tank) and run down their existing stocks of red diesel before this date.

 

5.45 As set out above, HMRC will minimise non-compliance (such as overdeclaring the amounts of fuel used for non-propulsion) by exploiting the information that it holds to identify risks as they arise. For example, HMRC will be able to compare how much fuel suppliers reclaim in deducted duty with the current amount that private pleasure craft users pay to their fuel suppliers on the proportion of red diesel they intend to use for propulsion.

Edited by Alan de Enfield
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The Gov't have suggested that a 60/40 split might be considered -

BUT if they see no comments or even no submissions why the **** should they bother?

Don't be apothetic - make a submission.

 

I was actually contacted by an HMRC senior person at the previous consultation  - that shows me that thye are prepared to listen.

If the boating community just sits on their hands  - we'll get what we deserve.

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It's not entirely clear to me whether  the 60/40 split will continue to be applied or whether that just up for discussion.  The worst case scenario is full duty payable .

At the 60/40 split the pump price at marinas  is presently about the same as supermarket fuel so there would be no motivation to  use marina bought fuel in a car nor any motivation to refuel boats with supermarket fuel (with associated greater risk of spillage into the aquatic environment).

If the 60/40 split is applied I will be happy with that . Those who have been buying red diesel  only at the domestic rate will see a substantial price increase.

Some suppliers have been offering 60/40 only for a while . Especially coastal sources where it is quite apparent the 60/40 split is generous in favour of the boater.

 

It seem to me marinas near me have adequate security with tanks being underground or otherwise adequately defended by gates and monitored by cameras . So no change there. If there are retailers that are genuinely at greater risk of theft they may have to close it will simply  transfer the business to those who remain.  

 

7 minutes ago, Athy said:

Apart from the fact that we would rather pay a low price than a high one, is there any justification for retaining red diesel for boating use?

None for propulsion.  

 

Just now, OldGoat said:

The Gov't have suggested that a 60/40 split might be considered -

BUT if they see no comments or even no submissions why the **** should they bother?

Don't be apothetic - make a submission.

The HMRC are not intersted in boaters say - its businesses that must respond.

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2 hours ago, Athy said:

Apart from the fact that we would rather pay a low price than a high one, is there any justification for retaining red diesel for boating use?

For some reason, despite the fact that the hypothecated definition of fuel duty, politicians have been slow to make this entirely clear and many people still labour under a misunderstanding. Removing the provision for boats to use red diesel highlights the change. However, it is not proposed to remove red diesel for heating so some form of split is reasonable even if, starting from scratch, separate tanks would be more logical. After all, we use separate tanks, and suppliers, for car/van/lorry diesel and home heating diesel.

 

I'm just a tad surprised that some politicians have not locked on to this issue as an opportunity to demonstrate our 'new freedoms' to 'take back control' and revert to the status ante quo, which seems rarely to have had problems. (That's a sociological not political comment, BTW!)

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Well I agree that individual boaters should be responding to this consultation and that having more replies is better.  Here are a few ideas.

 

Being charged 20% VAT on your boat diesel instead of 5% is almost certain to make it more expensive.

 

Views are being sought on the 60:40 split, you can have your say about this.

 

There are known issues with bio diesel and inland cruising.  (Shelf life and diesel bug.)  Why not remind HMRC.

 

Do you have a view on emptying your boat tank by April 2022 and then potentially having to wait to refill while your supplier flushes his equipment and gets white delivered.  The proposed changeover date coincides with the end of stoppages and the Easter holidays.

 

As I always try to keep my tank topped up to minimise condensation, having to run it down (during or before the winter) is not very enticing.  I'd also expect to need an engineer or mechanic to help clear air locks after refilling, as this is what happened when we had a diesel problem.  I also don't know how I'm supposed to move my boat to the diesel point to refuel when my tank is empty.

 

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1 minute ago, Lady C said:

Do you have a view on emptying your boat tank by April 2022 and then potentially having to wait to refill while your supplier flushes his equipment and gets white delivered.  The proposed changeover date coincides with the end of stoppages and the Easter holidays.

I read t as you do not require to have your tanks cleaned and can use what remains in your tanks BUT that all purchased after the introduction date must be 'White'

 

Just keep all receipts for fuel purchases from April 2022.

 

I currently have over 2000 litres in my tanks and will be keeping them topped up to avoid condensation - I expect to have a similar amount on WD-Day (White Diesel Day)

 

5.44 Like for other end users of red diesel, the government does not propose to mandate that private pleasure craft users have to flush out their tanks to remove traces of red diesel when these changes come into force. However, it expects them to ensure that they do not purchase red diesel for use from the date that it is banned (except for a separate non-propulsion tank) and run down their existing stocks of red diesel before this date.

 

 

 

 

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32 minutes ago, Lady C said:

Alan - the key words are at the end.  'and run down their existing stocks of red diesel before this date'.

 

There's nothing stopping you putting white diesel in the tank earlier than the changeover date if this is a major concern.  A lot of yachties who like sailing to European ports have been doing it for years now.

 

Admittedly losing out on the likely 60:40 split might sting the wallet a bit!

 

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4 hours ago, TheBiscuits said:

 

 A lot of yachties who like sailing to European ports have been doing it for years now.

 

Admittedly losing out on the likely 60:40 split might sting the wallet a bit!

 

Not really  much of an issue  in a Yacht  owner . A yacht may consume less than 100 litres a year .

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I was under the impression it was Belgium who went to extremes on traces of Red Diesel.....  but a more relaxed view in other countries.

I think garage diesel is about £1.19 per litre, I seem to recal my last  (split) fuel worked out at 90p per l, over winter and lockdown I paid 85p, at a marina, so I would be paying an extra 30p per l, and of course, it's also 'the principle ', trying to be eco-friendly by using minimal fuel, and public transport.

Edited by LadyG
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