Red Deisel after 1/11/08

[Cinimod]

Got this today in the IWA Bulletin;

 

Red Diesel

 

Contrary to expectation, H M Revenue & Customs has confirmed that it only intends the lower (energy) rate of 5% VAT to apply to the whole supply of red diesel, whether used for domestic energy consumption on a vessel (e.g. heating, appliances, etc), or propulsion, rather than the general rate of 17.5%, or differing rates for the separate components of usage. H M Revenue & Customs has issued a guidance note at www.hmrc.gov.uk/briefs/excise-duty/brief4908.htm

 

So I suppose that is good news in a way...

 

Their example of calculation;

 

Propulsion calculation (ie 60 per cent)

60 litres @ 0.70ppl = £42

60 litres @ 0.4066 = £24.40 (additional duty)

VAT @ 5% = £3.32

Propulsion Total = £69.72

 

Domestic calculation (ie 40 per cent)

40 litres @ 0.70ppl = £28

VAT @ 5% = £1.40

Domestic Total = £29.40

 

Transaction Total = £99.12

 

What I want to know is where do they get their diesel at 70ppl - our marina is 95ppl - so does that mean it would be £1.42 per litre??? WHY would anyone buy red at that price when white is £1.10 or lower ??? (Even their own calculation makes it £1.16 per l for propulsion)

 

Personally I am still confused by it all...

[WJM]

I must be one of the first to fill up under the new taxation regs. My usual supplier simply sells at a 60/40 split, no argument, that is how they sell, take it or leave it. They did say that they are selling a more favorable split to the residential moorers in their own marina where they know their boats never move, but for a punter like me who just rolls up it is 60/40 or nothing.

[denboy]

I must be one of the first to fill up under the new taxation regs. My usual supplier simply sells at a 60/40 split, no argument, that is how they sell, take it or leave it. They did say that they are selling a more favorable split to the residential moorers in their own marina where they know their boats never move, but for a punter like me who just rolls up it is 60/40 or nothing.

obviously not taking any notice of the rules from hmc then

[chris w]

I must be one of the first to fill up under the new taxation regs. My usual supplier simply sells at a 60/40 split, no argument, that is how they sell, take it or leave it. They did say that they are selling a more favorable split to the residential moorers in their own marina where they know their boats never move, but for a punter like me who just rolls up it is 60/40 or nothing.

What's the name and location of the supplier?

 

Chris

[WJM]

"obviously not taking any notice of the rules from hmc then"

 

 

No - which is very much the point I have been making previously on here. In my experience, HMRC are happy to ignore practices that are technically 'wrong' if it means the revenue stream is protected.

[dacaB]

" in their own marina where they know their boats never move "

What has it got to do with them ?

 

 

 

Is not self declaration a right rather than a privilege ?

Edited November 3, 2008 by dacaB

[carlt]

Will anybody be reporting diesel suppliers, if the are breaking the law?

[Cinimod]

I must be one of the first to fill up under the new taxation regs. My usual supplier simply sells at a 60/40 split, no argument, that is how they sell, take it or leave it. They did say that they are selling a more favorable split to the residential moorers in their own marina where they know their boats never move, but for a punter like me who just rolls up it is 60/40 or nothing.

What price did you end up paying?

Can you give us a break down of your bill?

[WJM]

To my mind it is really simple. Anyone who deals directly with HMRC knows that you dont mess with them. They have extraordinary powers and dont hesitate to use them. The vendor I refer to are doing the commercially sensible thing and making sure they have covered their backs. Regardless of any ridiculous and unworkable self-declaration, they will be able to point at their processes and say they have had no part in any wrong doing. I told him I could have legally demanded a 90/10 split and he just shrugged his shoulders and said I could demand all I like. A private commercial business has the right to refuse service.

 

 

I possibly do use 60/40, or possibly 90/10 or even 10/90, but there is no know system for establishing this. It is totally obvious that any taxation system that involves sticking a finger in the air and thinking of a number is utterly absurd and unworkable and when it does all does come crashing down, this retailer is not going to have his business collapse under a HMRC penalty. You can argue all you like that the onus is not on the retailer but anyone who has actual first hand experience of HMRC will know taking this line is a huge commercial risk.

 

 

Self declaration - lets try that with Income Tax then!

[denboy]

""Self declaration - lets try that with Income Tax then!""

i do this every year its called self assessment

[WJM]

Bill was:

 

89.66 litres

 

89.66 @ £0.85 = £76.21 - thus far same as pre 1/11/08

 

Plus;

 

53.8 litres (60%) @ £0.43 additional tax = £23.13

 

 

So £23 extra!

 

 

=========================================================================

 

"""Self declaration - lets try that with Income Tax then!""

i do this every year its called self assessment"

 

 

So do I, then they come periodically and rip my books apart and slap a load of extra taxes on me - you cant win! :-)

Edited November 3, 2008 by WJM

[alan_fincher]

Will anybody be reporting diesel suppliers, if the are breaking the law?

 

I've heard tell there will be a "snitch" web-site for this !

 

Of suppliers I have talked to close to us....

 

Cow Roast Marina

Uxbridge Boat Centre

Coal boats Bletchley & Argus

 

all say they will allow self declaration of what ever percentage you give, so the maverick behaviour by WJM's supplier doesn't look like it will necessarily be the norm.

 

I should have asked coal boats Archimedes & Ara further down the cut, but I forgot to.

 

Alan

[grahoom]

Self declaration - lets try that with Income Tax then!

 

Isn't that what the Self Assessment is?

[Cinimod]

I possibly do use 60/40, or possibly 90/10 or even 10/90, but there is no know system for establishing this.

 

If you do not use 60/40 then you have just made a false declaration and HMRC could come after you - from my understanding.

 

However, from reading this - if you consistantly declare 60/40 it looks like HMRC are not going to bother you, it is the people who are delcaring a constant 90/10 and do not have a residential or other permanent mooring and hardly cruise that are going to be checked.

 

As long as the business had all the signed declarations, which they are going to have to keep for ANY declarations (60/40 or otherwise), they are in the clear... same as HMRC checking that you are doing the correct VAT returns - and YES, I have been through a couple of those in the last 18 years... both with NO issues as I kept all the paperwork they needed.

[denboy]

so does that mean you paid £1.28 per ltr for 54 litrs ish for a lower grade fuel as opposed to derv think i would rather go to a garage and pay £1.11 ltr for derv

[David Schweizer]

Bill was:

 

89.66 litres

 

89.66 @ £0.85 = £76.21 - thus far same as pre 1/11/08

 

Plus;

 

53.8 litres (60%) @ £0.43 additional tax = £23.13

 

 

So £23 extra!

 

 

£0.85 a Litre? !! I was only paying £0.73 a litre at a Marina a month ago, before diesel prices started to fall

 

At those prices, you are obviously already prepared to be ripped off, so I can understand your willingness to pay whatever is asked of you.

[bottle]

I think that was rhetorical but the answer is yes.

 

It will probably always be the same because of the scale of supply and demand costs.

 

Edit: answer to Denboy, David sneaked through on the nearside.

Edited November 3, 2008 by bottle

[David Schweizer]

....As long as the business had all the signed declarations, which they are going to have to keep for ANY declarations (60/40 or otherwise), they are in the clear... same as HMRC checking that you are doing the correct VAT returns - and YES, I have been through a couple of those in the last 18 years... both with NO issues as I kept all the paperwork they needed.

I agree. I used to submit monthly VAT returns for the Local Council when I was Parish Clerk. It is quite straightforward and they always responded with any rebates due quickly, and without fuss. There is a lot of myth spread around about HMRC by people who apparently have no working experience of their operation, probably because they are too lazy to put their mind around the regulations.

[david and julie]

so does that mean you paid £1.28 per ltr for 54 litrs ish for a lower grade fuel as opposed to derv think i would rather go to a garage and pay £1.11 ltr for derv

This is one of the problems isn't it. For easy figures assume you want exactly 100 litres @ 60/40, one would assume you could go to a garage and buy 60L of white and to a marina for the 40L of red. However the marina would want proof that you are residential to do this. The alternative, assuming you wanted an easy life, would be to declare 60/40 on the 40 litres from the marina, anything else and it sounds like you may get flagged up by HMRC.

 

The only true solution is to have twin tanks but unfortunately for most people thats impractical.

[magpie patrick]

To my mind it is really simple. Anyone who deals directly with HMRC knows that you dont mess with them. They have extraordinary powers and dont hesitate to use them. The vendor I refer to are doing the commercially sensible thing and making sure they have covered their backs. Regardless of any ridiculous and unworkable self-declaration, they will be able to point at their processes and say they have had no part in any wrong doing. I told him I could have legally demanded a 90/10 split and he just shrugged his shoulders and said I could demand all I like. A private commercial business has the right to refuse service.

 

 

I possibly do use 60/40, or possibly 90/10 or even 10/90, but there is no know system for establishing this. It is totally obvious that any taxation system that involves sticking a finger in the air and thinking of a number is utterly absurd and unworkable and when it does all does come crashing down, this retailer is not going to have his business collapse under a HMRC penalty. You can argue all you like that the onus is not on the retailer but anyone who has actual first hand experience of HMRC will know taking this line is a huge commercial risk.

 

 

Self declaration - lets try that with Income Tax then!

 

I suspect that won't wash should HMRC decide to do something, and one day there'll be an inspector too bored to do anything else but check: this guy or girl will then think it a bit suss that ALL the returns are 60/40, and will start asking questions, and may conclude that your supplier is guilty of encouraging others to defraud the tax system. It would be one hell of a defence for a boater to say "I needed fuel urgently, and the supplier would only sell at 60/40".

 

If this move also results in other yards losing business (I should probably pay 100% propulsion, a yard that would only accept 60/40 would be ideal) it won't be long before someone shops him.

[alan_fincher]

£0.85 a Litre? !! I was only paying £0.73 a litre at a Marina a month ago, before diesel prices started to fall

 

At those prices, you are obviously already prepared to be ripped off, so I can understand your willingness to pay whatever is asked of you.

David,

 

The price variation between regions seems to remain pretty large.

 

Unfortunately those of us berthing our boats in the South can't easily come up to the midlands to fill up.

 

Prices approaching 80 ppl are still very much the norm down here, (although I'd baulk at paying 85 ppl, I must admit, when perhaps 75 ppl is achievable if you pass the right place).

 

But if anybody knows of prices towards 70 ppl and below on the GU, it would be helpful to others if they posted them.

 

Alan

[Amicus]

Imagine a boat with separate tanks at WMJ's supplier filling the engine tank. "That 100% propulsion" says the boater "no it ain't" says the supplier "40% of that is domestic use". Somebody just broke the law, question is, who?

Boggling

[david and julie]

I agree. I used to submit monthly VAT returns for the Local Council when I was Parish Clerk. It is quite straightforward and they always responded with any rebates due quickly, and without fuss. There is a lot of myth spread around about HMRC by people who apparently have no working experience of their operation, probably because they are too lazy to put their mind around the regulations.

I rather suspect they would view a mistake by local council officials as more than likely genuine because the officials concerned wouldn't gain personally.

 

In reality the same can't be said of a private enterprise where the apparent "mistakes" may indeed result in personal gain. In my experience they assume you are fiddling first and then try to find the fiddle.

 

I did my own VAT returns for over 25 years and I also never had a problem despite a couple of inspections, but they can "fine" you for mistakes, even unintentional ones, if they want to.

[David Schweizer]

David,

 

The price variation between regions seems to remain pretty large.

 

Unfortunately those of us berthing our boats in the South can't easily come up to the midlands to fill up.

 

Prices approaching 80 ppl are still very much the norm down here, (although I'd baulk at paying 85 ppl, I must admit, when perhaps 75 ppl is achievable if you pass the right place).

 

But if anybody knows of prices towards 70 ppl and below on the GU, it would be helpful to others if they posted them.

 

Alan

Yes, I must admit that I was a bit surprised two years ago when the diesel boat charged 5p a litre more than the boatyard near my Midlands moorings. But this hike in prices is all quite recent. I can remember, less than ten years ago, that some of the diesel sold on the Southern G.U. was cheaper than any sold south of Birmingham.

 

 

 

 

 

I rather suspect they would view a mistake by local council officials as more than likely genuine because the officials concerned wouldn't gain personally.

 

In reality the same can't be said of a private enterprise where the apparent "mistakes" may indeed result in personal gain. In my experience they assume you are fiddling first and then try to find the fiddle.

 

I did my own VAT returns for over 25 years and I also never had a problem despite a couple of inspections, but they can "fine" you for mistakes, even unintentional ones, if they want to.

So you do the returns carefully, or employ an accountant.

 

There isn't really any excuse for getting the returns wrong, only imaginary ones dreamt up by people who are not prepared to recogniose the responsibilities of running their own company. I always found thet the HMRC were more than willing to offer help and advice if a problem arose requiring more information.

[denboy]

This is one of the problems isn't it. For easy figures assume you want exactly 100 litres @ 60/40, one would assume you could go to a garage and buy 60L of white and to a marina for the 40L of red. However the marina would want proof that you are residential to do this. The alternative, assuming you wanted an easy life, would be to declare 60/40 on the 40 litres from the marina, anything else and it sounds like you may get flagged up by HMRC.

 

The only true solution is to have twin tanks but unfortunately for most people thats impractical.

But at the end of the day its the person who has made the declaration the tax man will go for the supplier is not the enforcing authority you do not have to prove anything to the supplier how could you prove anything in any case walk in the officed with a diesel stove under your arm saying its for this