Red Diesel

[dacaB]

Just C/Peed this from the ABNB site, good site, interesting 'stuff'.....

 

The idea that a boater would be able to define his/her own propulsion/domestic useage when the time comes on 01/08/2008 has firmly been squashed. A meeting was held on 30th April between HM Revenue & Customs, IWA, British Marine Federation, Residential Boat Owners Association and a number of other user groups. HM Revenue & Customs is agreeable to red diesel being sold on the basis of a fixed percentage for propulsion (which would be taxed at the full rate), and a fixed percentage for domestic and heating use (which would be taxed at the present rate). This is supported by the trade and most user groups as it would make administration of the sale of red diesel simpler, and save each boat owner having to justify their individual usage. Although HMRC has suggested an 80% propulsion to 20% domestic use split, IWA has used data from the recent IWA membership survey to show that the likely average usage is nearer to 60% for propulsion and 40% for domestic use. IWA is further developing this into a written argument with statistical support for HM Revenue & Customs, which if accepted, could be used evidence to the European Union if the percentage split were to be challenged. A further dispensation might be possible for residential boaters, whose percentage use of fuel for propulsion is likely to be even lower, provided a satisfactory definition of ‘residential boater’ can be agreed.

 

 

HM Revenue & Customs has also suggested that purchasers of red diesel will be required to sign a receipt at the point of refueling, which would have specific wording to certify an element of use of the fuel for domestic purposes (at the agreed fixed rate). This could be made less onerous for regular customers of a fuel supplier, who might be able to declare just once a year. Only a signature will be required, with no requirement for boat details, etc.

 

 

..........maybe boaters will get a fairish deal afterall.

Edited May 7, 2008 by dacaB

[bottle]

Ah! but, Yer! but,

 

What about this scenario:

 

A boat has two tanks, one for propulsion (and some generation) and another purely for generation and heating.

 

When filling the 'second tank', if the ratio is fixed, they will be penalised and be paying high(er) tax than required by law for heating and generation.

 

 

[Machpoint005]

Ah! but, Yer! but,

 

What about this scenario:

 

A boat has two tanks, one for propulsion (and some generation) and another purely for generation and heating.

 

When filling the 'second tank', if the ratio is fixed, they will be penalised and be paying high(er) tax than required by law for heating and generation.

 

 

 

Surely the two tanks are for two different (and identifiable) purposes, so the need to split between dutiable and non-dutiable uses never arises? It's the same as putting red diesel in a vehicle (all propulsion) and a generator (all generation). There would be no 80/20 (or 60/40) split in either case then.

 

If the proposal means I get 20% (or 40%) off the duty I pay on red diesel, I'm satisfied.

 

Ian

[bottle]

Ian

 

I agree they are for two different uses but the way the wording is, it appears that all 'red' diesel sold from marinas and boats will be sold at a fixed % of propulsion and generation/heating.

 

This will penalise the 'second tank'.

 

As usual one solution does not fit all.

 

[denboy]

all my red is for the fork truck Edited May 7, 2008 by denis boyle

[RobinR]

Another consideration - if, in spite of discounts, boatyard fuel costs more than supermarket fuel, canalside supply may disappear and spillage pollution result or do I forsee bio-fuel convesions becoming the norm!

[Wrinkley]

Any idea how the new tax will be applied to barrels of red? I guess you can still buy it by the 45gall drum. Any clue as to cost.

 

Graham

[carlt]

Any idea how the new tax will be applied to barrels of red? I guess you can still buy it by the 45gall drum. Any clue as to cost.

 

Graham

If someone is buying red for plant or agricultural use then the duty is the same as today.

 

If they're putting it in a boat but paying the reduced duty then they are a tax-dodger. No better than if they were not paying the BW licence.

[gary4lw]

(If they're putting it in a boat but paying the reduced duty then they are a tax-dodger. No better than if they were not paying the BW licence . )And on that bombshell how much of the extra tax will come back to the canals then???

[Yoda]

I'm going to buy myself a domestic fuel tanker and fill it with red diesel. Parking it up near a bridge somewhere and dispencing cheap fuel all summer will be heaven.

[Dylan]

(If they're putting it in a boat but paying the reduced duty then they are a tax-dodger. No better than if they were not paying the BW licence . )And on that bombshell how much of the extra tax will come back to the canals then???

My thoughts entirely. Even so, Carl has a fair and valid point. There is no hierarchy of sin

[RobinR]

If someone is buying red for plant or agricultural use then the duty is the same as today.

 

If they're putting it in a boat but paying the reduced duty then they are a tax-dodger. No better than if they were not paying the BW licence.

You mean just like speeding motorists with radar detectors are speed tax-dodgers??? And don't we all hate them and they don't self declare!!! Glass houses and throwing stones comes to mind.

 

But yes, I guess fuel distribution depots well away from recognised navigations will continue to sell barrels of red as at present!

[carlt]

You mean just like speeding motorists with radar detectors are speed tax-dodgers??? And don't we all hate them and they don't self declare!!! Glass houses and throwing stones comes to mind.

Dunno, never been done for speeding, though you miss my point entirely.

 

I don't care whether anybody is dodging taxes, of whatever kind, none of my business. I just hope those that dodge one type of taxation won't be condemning those that choose to dodge another.

 

 

And on that bombshell how much of the extra tax will come back to the canals then???

 

Do we only pay taxes to fund the canals?

 

It will go into the public purse, like all taxes, to be distributed by an incompetent government, to incompetent government departments, one of which is BW, partly funded by boat taxes, partly centrally funded.

[Wrinkley]

Will it only be dogging tax if it is used for propulsion? If used for electric/heat generation it will that be ok. So safe to put into my separate tank.

Graham

[carlt]

Will it only be dogging tax if it is used for propulsion? If used for electric/heat generation it will that be ok. So safe to put into my separate tank.

Graham

The tax increase is for propulsion only but it would appear that you will be told what proportion of your diesel is for heating and what is for propulsion.

[Ex- Member]

The tax increase is for propulsion only but it would appear that you will be told what proportion of your diesel is for heating and what is for propulsion.

 

Typical of the tax man to be so presumptious We have separate tanks for heating, so if we have to buy fuel based on a figure or percentage of the fuel cost determined by HMRC. Then having separate tanks would be irrelevant if that's the case. They might choose to do this as it's not difficult for boaters with separate tanks to put a line in to transfer heating diesel to your propulsion tank LOL

 

As to dodging taxes, we recently took on a tax consultant for our business, it's quite a revalation how much tax can be legitimately claimed back or put against tax. If we had known all these legal tax evasive tricks when we started the businesses, we might have made some money by now Especially under this governments tax regime.

[BLACKCOUNTRY LAD]

The tax increase is for propulsion only but it would appear that you will be told what proportion of your diesel is for heating and what is for propulsion.

I think most Boatyards & Marinas will continue to sell Red diesel but with a big sign next to the pump saying we only sell diesel for propulsion.

[alan_fincher]

I think most Boatyards & Marinas will continue to sell Red diesel but with a big sign next to the pump saying we only sell diesel for propulsion.

No, I don't think so...,

 

As I understand it, the latest twist in this continuing saga, is that thre government will come up with an arbitrary percentage of the fuel that an "average" boater is supposed to use for propulsion. The starting bid seems to be 80%, but those campaigning are trying to make a case for a lower figure, maybe 60%.

 

Whatever percentage is decided, then you will then pay that percentage of the duty on each litre. So if full duty would be 50p per litre, at the 80% you will pay 40p, (or if they could be persuaded as low as 60%, then 30p).

 

That's what weill be charged at the pump. If you only cruise, and do no heating or electricity generation, (though I suppose everybody charges a few batteries), it will "favour" you, but if you never move, and just use your engine as a generator and water heater, you will be relatively disadvantaged.

 

The big unanswered question seems to be what happens to people who have 2 tanks, where one is never used for any propulsion. At the moment it sounds like it could be tough luck, (well at least if your fuel comes from canalside pumps). You may just have to pay the "rebated" duty on everything you use, irrespective of which tank you are filling.

 

I hope that's right - I'm sure someone will tell me if it isn't!

 

Alan

[Nickhlx]

Could someone enlighten me as to what typical volumes of fuel are likely to be consumed per week with the following "lifestyle"..

 

1) cruising each day for say 6 hours,

2) heating with say a Webasto 5kW for say 1 hr in the morning and 3hrs in the evening

 

on a modern, (i.e. well insulated ) say 58 foot narrowboat, with the engine doing most of the hot water heating.

 

I realise its impossible to be very accurate, but I am guessing at 1 ltr per hour for the engine ( on average including idling at locks, and 1/2 litre per hour for the heating, so around 40 litres per week for propulsion and 14 ltrs for heating ?

 

I am sure many have real life figures readily to hand and peoples lifestyles will be quite different, but all I am trying to establish is a ballpark figure... if its easier to say " 200 litres generally lasts me a month in summer and 2 weeks in winter" for "x" hrs cruising a day, that would be useful..

 

Thanks,

 

Nick

[alan_fincher]

I've no direct experience of using diesel for heating, but I'd say 1 litre per hour use by the engine when cruising is fairly optimistic, unless it's a very efficient engine in quite a small boat.

 

We use more like 1.5 litres an hour on canals, (50 foot boat, with a fairly elderly BMC 1800).

 

It's hard to be precise, but we always seem to be around that figure.

 

Alan

[Cheshire cat]

We used to do 1.5 with our BMC but now we've got a Nanni we're up to nearly 2 litres per hr

[alan_fincher]

We used to do 1.5 with our BMC but now we've got a Nanni we're up to nearly 2 litres per hr

Sounds like a recommendation to update to a modern engine then !?!

[NB Alnwick]

Sadly, it is becomming clear that the level of legal declarations, form filling and record keeping is going to add onerous responsibilities on the suppliers and the cost of this will have to be passed on to the consumer. This may not be good news for us and could well mean that the commercial viability of supplying diesel to boaters will change significantly.

 

But yes, I guess fuel distribution depots well away from recognised navigations will continue to sell barrels of red as at present!

 

All suppliers are required to keep detailed records of all red diesel sales for the Department of Customs and Revenue. That includes supplying to the Department of Customs and Revenue the name and address of anyone buying untaxed fuel. There are very serious penalties for avoiding the correct payment of duty, for instance they could confiscate your boat or motor vehicle.

 

 

 

 

We used to do 1.5 with our BMC but now we've got a Nanni we're up to nearly 2 litres per hr

 

Our 53 year old, twelve litre, Kelvin K3 manages to average out at 1.9 Litres an hour - and that is pushing along a 62 foot boat that draws, on average, three feet of water for most of its length!

[Dominic M]

Just C/Peed this from the ABNB site, good site, interesting 'stuff'.....

 

The idea that a boater would be able to define his/her own propulsion/domestic useage when the time comes on 01/08/2008 has firmly been squashed. A meeting was held on 30th April between HM Revenue & Customs, IWA, British Marine Federation, Residential Boat Owners Association and a number of other user groups. HM Revenue & Customs is agreeable to red diesel being sold on the basis of a fixed percentage for propulsion (which would be taxed at the full rate), and a fixed percentage for domestic and heating use (which would be taxed at the present rate). This is supported by the trade and most user groups as it would make administration of the sale of red diesel simpler, and save each boat owner having to justify their individual usage. Although HMRC has suggested an 80% propulsion to 20% domestic use split, IWA has used data from the recent IWA membership survey to show that the likely average usage is nearer to 60% for propulsion and 40% for domestic use. IWA is further developing this into a written argument with statistical support for HM Revenue & Customs, which if accepted, could be used evidence to the European Union if the percentage split were to be challenged. A further dispensation might be possible for residential boaters, whose percentage use of fuel for propulsion is likely to be even lower, provided a satisfactory definition of ‘residential boater’ can be agreed.

 

 

HM Revenue & Customs has also suggested that purchasers of red diesel will be required to sign a receipt at the point of refueling, which would have specific wording to certify an element of use of the fuel for domestic purposes (at the agreed fixed rate). This could be made less onerous for regular customers of a fuel supplier, who might be able to declare just once a year. Only a signature will be required, with no requirement for boat details, etc.

 

 

 

 

..........maybe boaters will get a fairish deal afterall.

 

I spoke to Beryl McDowall - retiring chair of the RBOA - yesterday. She told me that nothing has been decided yet. It will be a fixed proportion it seems, but how it works is yet to be finalised.

Edited May 11, 2008 by Dominic M

[Ex- Member]

As the price of Red diesel for propulsion can't be discounted. Nor Red diesel for heating. The only way I think that this problem can be solved is when HMRC decide an acceptible percentage of Say 30% for heating and energy. Then If you purchase diesel for propulsion say 1000 litres, that then gives you the right to purchase diesel for heating of 300 litres at the lower rate. Or on topping up your tank at the marina say with 200 litres, you are allowed to purchase another 60 litres at the lower rate.

 

As far as I can see there's no other way to discount, as the price for Red diesel from Nov 08 has already been fixed and can't be changed or discounted at the point of sale.

 

This way it's easy for the revenue to see if there's any abuse of the seystem, as they can always check the reciepts paid at full duty against reciepts for low duty, and not rely on self certification of the buyer. This would only work though if you purchased Red diesel otherwise you could use reciepts for forecourt white diesel to up your allowance.