Permitted use of Red Diesel?

[Athy]

25 minutes ago, David Mack said:

... Rosé.

 

Beat me to it!

1 hour ago, Sea Dog said:

Yup. And how many canalside fuel stops will stay in the diesel supply business when, even after or disregarding the dye removal, they have to charge, what, £1.50 a litre(?) to cover their higher costs and lower turnover than a roadside retailer?

Probably those at marinas? There's a large captive clientele, virtually guaranteeing brisk sales, and often (as is the case with our nearest marina, Cropredy) no convenient road fuel outlet for miles.

 

Probably also any hire-fleet base, as they have to stock diesel to replenish their own boats' tanks, so it would be daft not to offer it for sale to other people as well.

 

Edited February 12, 2021 by Athy

[ditchcrawler]

I seem to have missed the announcement of how and when the sale of red to boaters will change, can someone please point me to it, Last I heard the had just finished consultations.

Edited February 12, 2021 by ditchcrawler
spillin

[Alan de Enfield]

7 minutes ago, ditchcrawler said:

I seem to have missed the announcement of how and when the sale of red to boaters will change, can someone please point me to it, Last I heard the had just finished consultations.

 

It was announced in the 2020 budget that it would be implemented 1/4/22.
(The consultation was just about which way was 'best' to implement it).

 

From the .gov website :

 

 

At Budget 2020, the government announced that it will remove the entitlement to use red diesel from April 2022, except in agriculture (as well as forestry, horticulture and pisciculture), rail and for non-commercial heating (including domestic heating).

 

 

The options under consideration for Boaters & suppliers to boaters :

 

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.

 

 

[doratheexplorer]

6 minutes ago, Alan de Enfield said:

 

It was announced in the 2020 budget that it would be implemented 1/4/22.
(The consultation was just about which way was 'best' to implement it).

 

From the .gov website :

 

 

At Budget 2020, the government announced that it will remove the entitlement to use red diesel from April 2022, except in agriculture (as well as forestry, horticulture and pisciculture), rail and for non-commercial heating (including domestic heating).

 

 

The options under consideration for Boaters & suppliers to boaters :

 

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.

 

 

So pretty much the same as now then.

[ditchcrawler]

But has it been announced HOW it will be implemented. People here are saying what will happen, but DO we know of is it still all just guessing?

[bizzard]

I remember during a winter in the 1970', I was towing someone sailing cruiser back from Burnam on Crunch with my Land Rover, roads were pretty treacherous old A roads patchy ice. Chugging along at about 30 mph a great brute Range Rover towing a typical flashy speed boat flew past me, about two miles down the road there it was half on it's side in a ditch, I could have stopped to hoik it out but I would have had to disconnect my trailer and blocked the road to do it, but as the occupants had go out of it ok and there was a village close by I didn't stop.

[Alan de Enfield]

35 minutes ago, doratheexplorer said:

So pretty much the same as now then.

 

 

Yes (probably)

It will just cost more per litre.

But for those who have been making accurate declarations the difference will be limited, for those who have been making false declaration the difference maybe considerable.

 

If it increases by (say) 20p per litre and you use 300 litres per annum purely on propulsion then it is going to add £60 per annum to the cost of boating, for those of us that don't move it will add nothing, and for those of us that use 1000 litres per annum it will add £200 per annum

 

The big question is the implementation of VAT, currently VAT is at 5% on red diesel (up to 2300 litre purchases), in future it looks as if the standard rate (20%)  will be applied to ALL white (as it currently is at present)

 

That could add another 20p (ish) per litre to the base price. Whilst we can buy the rebated duty diesel for domestic use, I doubt we will get the VAT reduced.

 

Another reason to go the the local Supermarket and fill your cans.

 

 

 

34 minutes ago, ditchcrawler said:

But has it been announced HOW it will be implemented. People here are saying what will happen, but DO we know of is it still all just guessing?

 

We do know what is happening (No red diesel if you only have a single tank, etc etc etc) what we don't know is how we will pay for it, (fixed rate, or 60/40 etc etc)

Edited February 12, 2021 by Alan de Enfield

[David Mack]

1 hour ago, ditchcrawler said:

I seem to have missed the announcement of how and when the sale of red to boaters will change, can someone please point me to it, Last I heard the had just finished consultations.

My understanding is the same. The principles, set out in the budget, are generally fine, in that we get to keep a split declaration and can continue to use a single tank, just that the contents will be white, and we get a rebate on the domestic part, rather than just paying the duty on the propulsion part. But the consultation proposals threw up a number of unintended consequences which were much discussed here and elsewhere. And I am not aware that government has said anything more since the end of the consultation.

[Lady M]

Clearly questions should be asked about the VAT aspect of the duty rebate scheme.  However, there is another potential issue with the rebate scheme.  The 'extra duty' is currently 46.81p per litre.  Therefore, each 10% rebate costs the vendor 4.68p per litre until it can be reclaimed from HMRC. 

 

My perception is that most canalside vendors add a mark up of 20-25p per litre.  Therefore, it's not hard to see that, when a domestic percentage rebate of more than 40-50% is claimed, the amount rebated would exceed the vendor's mark up.  This would be very bad for their cashflow, and almost certainly result in more admin for both vendors and HMRC. 

 

Under the current scheme, as a small boat club selling diesel, we are very happy to pay the duty collected annually.  If we had to give rebates as described above, we would want to claim back much more frequently.

[Alway Swilby]

I'm not sure about this wide held assumption on here that canal side retailers of diesel will stop selling it. Their prices will be higher than a supermarket mainly due to the difference in volume of sales. As a continuous cruiser without a car I would be happy to pay a higher price, probably up to 30ppl more, to fill up canal side. It would save me the huge hassle of walking to said supermarket, buying over 100 litres of the stuff, somehow (no idea how) carrying it back to my boat then somehow emptying the diesel into my tank without spilling any.  I suppose a few small retailers might stop but I reckon the marinas will switch to white and still make money out of the deal. I also suspect that places like Wheaton Aston, Boroughbridge and other garages who already sell both white and red diesel will continue to do so just switching their boat sales to white.

[Mike Todd]

1 hour ago, Lady C said:

Clearly questions should be asked about the VAT aspect of the duty rebate scheme.  However, there is another potential issue with the rebate scheme.  The 'extra duty' is currently 46.81p per litre.  Therefore, each 10% rebate costs the vendor 4.68p per litre until it can be reclaimed from HMRC. 

 

My perception is that most canalside vendors add a mark up of 20-25p per litre.  Therefore, it's not hard to see that, when a domestic percentage rebate of more than 40-50% is claimed, the amount rebated would exceed the vendor's mark up.  This would be very bad for their cashflow, and almost certainly result in more admin for both vendors and HMRC. 

 

Under the current scheme, as a small boat club selling diesel, we are very happy to pay the duty collected annually.  If we had to give rebates as described above, we would want to claim back much more frequently.

I don't see the problem - if the seller rebates part then they will send the same amount less to HMRC so that it will be neutral as far as cashflow is concerned.

[Alan de Enfield]

58 minutes ago, Alway Swilby said:

It would save me the huge hassle of walking to said supermarket, buying over 100 litres of the stuff, somehow (no idea how) carrying it back to my boat

 

How many hours a week is the engine running ?

An average of 2 hours per day (6 hours every 3 days - is that unreasonable ?) would be only 20 litres per week.

There are many locations "within a weeks' travel" where a roadside petrol station would be wihin a few 100 yards of the canal it would not be overly impossible to fill two jerry cans and cart them about on a little truck. I do appreciate there will be someplaces where the availability may not quite as conveneient, but, there will be times when a petrol station is within a few yards and you can make a couple of trips.

eg: Sainsbury's petrol station within about 70 metres of the canal in Nottingham.

 

1 hour ago, Alway Swilby said:

........... somehow emptying the diesel into my tank without spilling any.

 

Thats easy - a syphon or a small pump. I made one out of pipe with an outboard 'hand genade'  (fuel bulb) . stand the jerry can on the stern, put the pipe in the tank, give a few squeezes to the bulb and the fuel flows without spilling a drop.

We used the same system on an almost daily basis (fuel tanks only 100 litre) when coming back from Croatia (3000 miles in 30 days) If we can do it at sea it should be easy enough to do it on a canal.

[LadyG]

3 hours ago, bizzard said:

I remember during a winter in the 1970', I was towing someone sailing cruiser back from Burnam on Crunch with my Land Rover, roads were pretty treacherous old A roads patchy ice. Chugging along at about 30 mph a great brute Range Rover towing a typical flashy speed boat flew past me, about two miles down the road there it was half on it's side in a ditch, I could have stopped to hoik it out but I would have had to disconnect my trailer and blocked the road to do it, but as the occupants had go out of it ok and there was a village close by I didn't stop.

I can better that, severe winter of '62 I was coming over the A66 towards Scotch Corner, snow either side about ten foot high , a truck was towing a rather large boat at a rather high speed, westward bound, the road was undulating, and rutted, the boat took it's own course, in to the ditch, I dare not stop, too icy!

Edited February 12, 2021 by LadyG

[Tracy D'arth]

6 hours ago, doratheexplorer said:

I mentioned all of these points and more when I responded to the consultation.

Likewise but who takes any notice of consultations unless they pay a fortune for them. There is also the increased likelihood of theft from the closed at night canal side suppliers.

[Lady M]

1 hour ago, Mike Todd said:

I don't see the problem - if the seller rebates part then they will send the same amount less to HMRC so that it will be neutral as far as cashflow is concerned.

The proposed scheme requires sellers to buy fuel at full duty (and VAT) and claim back the rebated duty.  Currently they buy at the lower rate of duty and collect any extra from purchasers.

[Mike Todd]

1 hour ago, Alan de Enfield said:

 

How many hours a week is the engine running ?

An average of 2 hours per day (6 hours every 3 days - is that unreasonable ?) would be only 20 litres per week.

There are many locations "within a weeks' travel" where a roadside petrol station would be wihin a few 100 yards of the canal it would not be overly impossible to fill two jerry cans and cart them about on a little truck. I do appreciate there will be someplaces where the availability may not quite as conveneient, but, there will be times when a petrol station is within a few yards and you can make a couple of trips.

eg: Sainsbury's petrol station within about 70 metres of the canal in Nottingham.

 

 

All this reminds of way back in the mists of time (late 1960's) when we had our first (20ft boat) with a 5hp outboard, we had to obtain petrol from a garage - there were next to no canalside facilities in most places - and I recall many a time carrying two cans back to the boat. There were equally few guides and no internet so it was often a matter of map craft an eyeball. No-one thought about safety of petrol cans on board just about 3 ft from the tiny gas rings!

[Alway Swilby]

1 hour ago, Alan de Enfield said:

 

How many hours a week is the engine running ?

An average of 2 hours per day (6 hours every 3 days - is that unreasonable ?) would be only 20 litres per week.

There are many locations "within a weeks' travel" where a roadside petrol station would be wihin a few 100 yards of the canal it would not be overly impossible to fill two jerry cans and cart them about on a little truck. I do appreciate there will be someplaces where the availability may not quite as conveneient, but, there will be times when a petrol station is within a few yards and you can make a couple of trips.

eg: Sainsbury's petrol station within about 70 metres of the canal in Nottingham.

 

 

Thats easy - a syphon or a small pump. I made one out of pipe with an outboard 'hand genade'  (fuel bulb) . stand the jerry can on the stern, put the pipe in the tank, give a few squeezes to the bulb and the fuel flows without spilling a drop.

We used the same system on an almost daily basis (fuel tanks only 100 litre) when coming back from Croatia (3000 miles in 30 days) If we can do it at sea it should be easy enough to do it on a canal.

It seems like an awful lot of faffing around just to save a bit of money. In the summer we often cruise about 4 hours a day  so thats more like 35 litres a week. How big are these jerry cans? 10 litres? If so that's four of them a week. We are used to cruising for three or four weeks between fill ups, I don't think I could be bothered with doing a supermarket trip a couple of times a week. We live on a 59' narrowboat with little storage space. Certainly haven't got room for a couple of jerry cans and a little truck. I could put them on the roof I suppose but then someone would nick them. And I'd have to store a smelly pump somewhere where the smell didn't matter

It's each to their own of course but I suspect that there will be enough people like me to keep some canalside diesel establishments  in business.

Incidentally google maps shows it as over 240 metres from the canal side in Nottingham to the Sainsbury's petrol station.

[Alan de Enfield]

36 minutes ago, Alway Swilby said:

How big are these jerry cans? 10 litres? If so that's four of them a week.

 

22 litres (4 gallons) but 'rated' as 20 litre.

Plenty available at 'surplus stores'

[jonathanA]

On 12/02/2021 at 18:15, Alan de Enfield said:

 

22 litres (4 gallons) but 'rated' as 20 litre.

Plenty available at 'surplus stores'

5 gallons I think you will find 4.4 l to the imperial gallon there 22l is 5 gallons.

I have several for petrol and occasionally people get a bit stropy at petrol stations saying it's illegal to fill cans greater than 10 litres... I just smile and say it's just 5 mate....

[Ikaty]

All this will not apply to people who use their boat as their primary residence (although it looks like you have to have a permanent mooring). 
 

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.

[CanalRetentive]

This thread has confused me, I usually just declare 90% domestic, the place I usually fill up (moved away though so no longer) said to me the change means from April 1st it will basically all be 100% domestic rate. This thread seems to imply its all going to get more expensive? So who is right?

[Alan de Enfield]

1 hour ago, Ikaty said:

All this will not apply to people who use their boat as their primary residence (although it looks like you have to have a permanent mooring). 
 

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.

 

 

I think that was the stated INTENTION at the time of consultation - when the law was finally amended it was slighltly different, in that for leisure boaters NOTHING has changed (still use Red desel for both propulsion and domestic, and pay the Duty on the relevant portion)

[OldGoat]

People are getting wound up over a non issue.

HMRC are interested in Revenue. They never wanted the burden of policing what for them was a very, very small revenue stream. Their main 'worry'  is to stop people using MGO in road vehicles - where the revenue loss could be large.

They do visit registered  retailers to 'wave the flag' as it were - but they have no way of measuring domestic vs propulsion use. As many boats don't move often or at all mebe 90% domestic is a fair split...

[CanalRetentive]

1 hour ago, OldGoat said:

As many boats don't move often or at all mebe 90% domestic is a fair split...

Running diesel stove pretty much 24/7 over winter and not cruising far. Its a fair assessment. Now the better weathers coming along with more cruising opportunities I'm sure I'll calculate the split to be less