November 1st Approaches and Still Confusion

[alan_fincher]

I asked our marina, Cow Roast on the Grand Union, what will they be doing about "red" gas-oil sales after November 1st.

 

First the good news...

 

They will strictly follow revenue guidelines, and will allow you to declare whatever percentage split you chose between "propulsion" and "other".

 

So no enforcing of an involuntary 60/40 split by them - they were surprised anyone could get away with doing that.

 

There will be two displayed prices, one for propulsion, and one for other, and you will be charged for so many litres at one, and the remainder at the other, based on your declaration.

 

Now the bad news....

 

I mentioned the decision that VAT will now be charged at the lower rate of 5% on both component.

 

They said that within the last two weeks the revenue has contacted them, saying they must charge the full 17.5% on the propulsion component. They have heard nothing about 5% for propulsion, and will be charging the full whack unless they hear from the Revenue (again) before November 1st.

 

I'm sure the recent link given on the 5% thing was to an official site, so wtf is going on?

 

Piss ups and breweries, and it is not the marinas' fault if this all goes pear shaped.

 

Alan

[Iain_S]

See

http://www.hmrc.gov.uk/briefs/excise-duty/brief4908.htm

 

QUOTE

 

VAT is charged at the reduced rate of 5% on fuel for propulsion and domestic use.

 

This example assumes a 60% (propulsion) and 40% (domestic) split for a purchase of 100 litres of red diesel (the price of diesel is assumed to be 0.70ppl which includes 9.69 ppl duty already paid to fuel supplier):

 

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

/QUOTE

 

Iain

[alan_fincher]

Yes,

 

I've seen that Iain, and have tonight e-mailed the link to that document to the marina manager.

 

The problem is that he as apparently within the last two weeks received a communication from HM Revenue & Customs along similar lines, but telling him to charge 17,5% on the propulsion component.

 

I find that very odd as I can find no such briefing on the Revenue site.

 

Not unreasonably though, he is saying he will do what he has been told to do, unless he receives something that over-rules what he has.

 

I don't imagine they are the only reseller of 'red' to get this notification, so I imagine come November 1st, some people will end up paying 17.5%, not 5% VAT on their propulsion fuel.

 

Of course they may all get correcting letters before then, but I wouldn't count on it!

 

It's going to be a mess for a while, methinks....

[Athy]

...or perhaps IN a while. I'm sure that most boaters have been busy acquiring, filling and stockpiling jerrycans or similar containers. Waterways fuel sales will experience their greatest ever boom in the next couple of weeks and then will slump for most of 2009 until we've all used up the contents of our cans.

[T.A]

...or perhaps IN a while. I'm sure that most boaters have been busy acquiring, filling and stockpiling jerrycans or similar containers. Waterways fuel sales will experience their greatest ever boom in the next couple of weeks and then will slump for most of 2009 until we've all used up the contents of our cans.

If as you say in your generalisation that all this diesel will be purchased in the next couple of weeks then I dont think it will be long into 2009 before the fuel providers start to sell because most of the gerry can purchases wil probably end up in the water! Something else to look forward to. Another piece of regulation ill thought out at the behest of our european masters!

[Athy]

Top tips, T.A:

- get a nice big funnel to pour through.

- Pour diesel before, not after, visting waterside pub.

[Guest]

If as you say in your generalisation that all this diesel will be purchased in the next couple of weeks then I dont think it will be long into 2009 before the fuel providers start to sell because most of the gerry can purchases wil probably end up in the water! Something else to look forward to. Another piece of regulation ill thought out at the behest of our european masters!

 

 

Well said.

[T.A]

Top tips, T.A:

- get a nice big funnel to pour through.

- Pour diesel before, not after, visting waterside pub.

I pulled into a marina this summer (I use the term loosely) to be told that their pump was not working and had not been working for some time but they would use a gerry can and a large funnel suffice to say they managed to get a fair amount into the marina and they have been doing this regular(that's using gerry cans I can't vouch what their average was!) In their defence they did try to eradicate the oil slick.

[chris w]

I pulled into a marina this summer (I use the term loosely) to be told that their pump was not working and had not been working for some time but they would use a gerry can and a large funnel suffice to say they managed to get a fair amount into the marina and they have been doing this regular(that's using gerry cans I can't vouch what their average was!) In their defence they did try to eradicate the oil slick.

 

I presume you didn't pay for the "fair amount" of your diesel they poured into the canal?

 

Chris

[Athy]

Was it 60% into the cut and 40% into your fuel tank?

[carlt]

Another piece of regulation ill thought out at the behest of our european masters!

As I'll be nipping across the channel, to get my cheap diesel, a few bottles of cheap booze and some quality food items, I wonder who I'd rather have as "masters".

 

Europe isn't to blame for this fiasco.

Edited October 19, 2008 by carlt

[AMModels]

IMO its not about Europe and what THEY say its about the way our own government fall over themselves to implement whats said to the nth degree and also to screw every last drop of tax revenue out of people in this country. I believe ours is the most heavily regulated and enforced country in Europe and we above all others take anything Europe says as gods word and dont interpret it to the benefit of our own nation.

[Nickhlx]

As I'll be nipping across the channel, to get my cheap diesel, a few bottles of cheap booze and some quality food items, I wonder who I'd rather have as "masters".

 

Europe isn't to blame for this fiasco.

 

 

So how much is red diesel in ? France ? I may be going there in a while and could get 150 litres if its worth it ?

 

Thanks,

 

Nick

[dor]

I believe that Belgium is in the same situation as us, i.e. having to start charging full duty on their red diesel. Does anyone know what they are doing? And what about other EU countries? How do they split the duty between propulsion and power generation?

 

How come it is apparently such a big proble mfor us, when we are just one of many countries in the EU that are bin a similar situation?

[carlt]

So how much is red diesel in ? France ? I may be going there in a while and could get 150 litres if its worth it ?

 

Thanks,

 

Nick

There is no "red diesel", as such, in the majority of EU countries. The same fuel goes into your boat , as your car.

 

The average duty levied, in mainland Europe, is around 25ppl. I believe it is 33.3ppl atm, in France.

 

This of course, tends to fluctuate, depending on which ports/ autoroutes are being blockaded, at the time.

 

 

 

I believe that Belgium is in the same situation as us, i.e. having to start charging full duty on their red diesel. Does anyone know what they are doing? And what about other EU countries? How do they split the duty between propulsion and power generation?

 

How come it is apparently such a big proble mfor us, when we are just one of many countries in the EU that are bin a similar situation?

I believe Belgium has adopted the same system as france. I'm not 100% sure, yet, though.

 

I'm not sure how they split propulsion/heating (if they do) but I'm trying to plough through some French language sites, to find out.

Edited October 19, 2008 by carlt

[magnetman]

There is no "red diesel", as such, in the majority of EU countries. The same fuel goes into your boat , as your car.

 

The average duty levied, in mainland Europe, is around 25ppl. I believe it is 33.3ppl atm, in France.

 

This of course, tends to fluctuate, depending on which ports/ autoroutes are being blockaded, at the time.

so if you were to run over there with a twin screw diesel lifeboat, fill up the tanks and come back to these shores you would save money compared to making a 60/40 declaration at a UK marina?

 

is it therefore likely that there will be significant smuggling of diesel from the continent to the UK?

[carlt]

so if you were to run over there with a twin screw diesel lifeboat, fill up the tanks and come back to these shores you would save money compared to making a 60/40 declaration at a UK marina?

 

is it therefore likely that there will be significant smuggling of diesel from the continent to the UK?

 

I have no diesel heating and my electricity is entirely supplied through wind and solar generation. My split would be 100/0 in favour of propulsion.

 

It's also fair to say that, if I'm going boating anyway, I might as well go where the food is better and the fuel is cheaper.

 

Fuel is already hawked around the East Coast, by european boats. This will increase, I imagine.

[Dominic M]

There is no "red diesel", as such, in the majority of EU countries. The same fuel goes into your boat , as your car.

 

The average duty levied, in mainland Europe, is around 25ppl. I believe it is 33.3ppl atm, in France.

 

This of course, tends to fluctuate, depending on which ports/ autoroutes are being blockaded, at the time.

 

 

 

 

I believe Belgium has adopted the same system as france. I'm not 100% sure, yet, though.

 

I'm not sure how they split propulsion/heating (if they do) but I'm trying to plough through some French language sites, to find out.

 

There certainly is red diesel. The majority of craft are commercial carriers and all are permitted to use it.

 

I believe Belgium will adopt the system of her neighbours and sell full rate white diesel to pleasure craft.

 

There is no split between propulsion and non-propulsion use. If you have a separate tank for an inboard generator and heating system you may fill that with red. If you have one combined tank, tough. But then it is much more practical with a larger boat of the dimensions that their canals can accommodate to install a secondary tank. The interesting thing is that in France, it is pretty hard to find white diesel on most of the inland waterway system. And there is nowhere like Britain that has such a high volume of pleasure craft on its inland waterways.

Edited October 19, 2008 by Dominic M

[cotswoldsman]

I asked our marina, Cow Roast on the Grand Union, what will they be doing about "red" gas-oil sales after November 1st.

 

 

I mentioned the decision that VAT will now be charged at the lower rate of 5% on both component.

 

They said that within the last two weeks the revenue has contacted them, saying they must charge the full 17.5% on the propulsion component. They have heard nothing about 5% for propulsion, and will be charging the full whack unless they hear from the Revenue (again) before November 1st.

 

I'm sure the recent link given on the 5% thing was to an official site, so wtf is going on?

 

Piss ups and breweries, and it is not the marinas' fault if this all goes pear shaped.

 

Alan

 

Alan

Would be interested to know how we was contacted this I guess would have to be via an official document as we are talking HMCR did he show you this document? Could you ask to see this document as it won't be covered by the Oficial Secrets Act? I spoke to my contact at HMCR last time on Friday and he never mentioned this to me I will call him Monday and ask.

 

 

Think the problem is that most retailers do not understand the new rules and confusion does rule.

[cotswoldsman]

Allan

 

Have spoken to HMRC and your marina is wrong the VAT remains at 5% for all uses. Would be interested to know where your marina got his information from. Have to say that my contact was in a meeting but the lady I spoke to looked at all the information she had and and confirmed the 5%

[churchward]

Think the problem is that most retailers do not understand the new rules and confusion does rule.

 

They are not the only ones!!

[cotswoldsman]

They are not the only ones!!

 

I just don't understand the confusion it is a very simple document!!

 

Oh Churchward not having a go at you I mean just that in my opinion HMCR have actualy published a very simple document in plain English that sets out how the system will work, I think that people are finding hard to believe that it is so simple and all looking for the catch. We have all been living in fear for the last couple of years thinking the worse and when we actually see what is happening it is hard to believe!!!!

[alan_fincher]

I just don't understand the confusion it is a very simple document!!

But if, as I'm led to believe, there are documents being issued by the Revenue, some of which state "propulsion" red will attract 17.5% VAT and others stating it will be charged at 5%, then it's not really very simple at all is it!

 

Do you fancy having an argument at my marina on November 1st when they try and add some 17.5% VAT to your fuel purchase, and apparently have an instruction from the tax man telling them they must.

 

I will see if I can try and sight their communication, but only stand any chance of this on the day the "right" person is in the office. (Those who know Cow Roast will be only too aware of what I'm talking about!).

[churchward]

I just don't understand the confusion it is a very simple document!!

 

Oh Churchward not having a go at you I mean just that in my opinion HMCR have actualy published a very simple document in plain English that sets out how the system will work, I think that people are finding hard to believe that it is so simple and all looking for the catch. We have all been living in fear for the last couple of years thinking the worse and when we actually see what is happening it is hard to believe!!!!

 

I agree the guidance that I have seen from HMRC is OK and understandable. However, how am I supposed to work out what fuel I use for propulsion and non-propulsion? I don't know how much additional fuel my alternator uses as I go along and it's charging my batteries for example. All I can do as I have said elsewhere is go by the recommended value of 60/40.

 

It is confusing though as Alan has said if Some/all suppliers have been told that Vat @ 17.5% applies to the propulsion portion by HMRC.

[BlueStringPudding]

I don't know how much fuel my engine uses when cruising as I have no gauge, have no idea of the size of the fuel tank, nor is there any kind of speedometer aboard.

 

This is a wild stab in the proverbial dark, but say it was a litre per hour at an average of 3.5mph cruising speed, which would mean I use about a third of a litre per mile?

 

To keep in the bare minimum of CC licensing rules I could say that I move 3 miles every 14 days - meaning a fuel consumption of about 2 litres per month on cruising alone? Can I then assume that all other fuel usage is for battery charging, heating etc? That's gonna surely mean a good 90% plus, will be charged at the lower rate!?!?

 

Or have I missed something?

Edited October 20, 2008 by BlueStringPudding