Red Diesel and Europe

[The Pipe]

I have pinched this off the Cruising Association site altho not many people on the canals wish to go boatin outside the UK it has a large impact on those that do.

 

HMRC Announcement on the use of Red Diesel in Private Pleasure Craft

 

What You Can Do

 

On 21st February, the HMRC issued draft legislation to take effect from 1st April, 2012, which HMRC describes as follows:-

 

“The measure provides that red diesel for use as fuel for propelling private pleasure craft can only be used in UK waters. All purchasers of red diesel for use as fuel for propelling private pleasure craft will be required to sign a declaration to that effect. All purchasers will be made aware that if they travel outside UK waters they will be subject to the restrictions and prohibitions of other Member States”.

 

The background to this is that the European Commission has challenged the UK practice of allowing the use of red diesel to propel private pleasure craft despite the condition that full duty is paid. This proposed legislation is an attempt to reduce the likelihood of such litigation. As it stands, this measure should have no impact on members sailing in UK waters only, but it will be prejudicial to those members wishing to sail outside of UK waters, and creates considerable practical problems.

 

HMRC have indicated that they are prepared to consider comments on the draft legislation from all interested parties by no later than 11th March, 2012.

 

The Cruising Association is in continuing discussions with the HMRC on this issue. You can help by expressing your concerns to both the HMRC and your MP and encouraging your friends and your local yacht club to do the same.

 

Comments to HMRC should be sent by email using the link envirotax.bst which can be accessed only via the HMRC web site at http://www.hmrc.gov.uk/drafts/rebated-pp-crafts.htm , or by post to:

 

Transport Taxes Team

HM Revenue & Customs

Room 1/37

100 Parliament Street

London SW1A 2BQ

[Roger Gunkel]

Hi Jim,

 

Thanks for that, although it has been discussed recently on this thread aswell My link. The discussion started around post 152 on page 8

 

Roger

[Rebotco]

This is the thin edge of a very nasty wedge - that I think will quite soon affect all UK boaters.

 

EU have been making noises for a while about the UK policy on red diesel being out of step with the rest of Europe, and want

 

it changed. UK government has been just making whimpering noises in response and will almost certainly cave in to Brussells

 

as usual. (It will of course increase government's income). Within a couple of years I predict that all our diesel on boats

 

will include full Duty and VAT - no more "declarations".

 

The Shylocks (or something like that!) want not only their pound of flesh, but our lifeblood too.

[GUMPY]

personally I cant see the problem.

We have to use 100% for propulsion when we are moving, the 60/40 or whatever percentage is declared is to allow for heating/generation.

Red at 100% is more expensive that white so why is everybody complainging unless of course they are on the fiddle.

Those that have petrol powered boats have to pay full duty and always have.

Those with sense will or already have fitted a second tank to use red for heating etc.

 

We will be on white for propulsion within two years so better get prepared.

[Nautihamstern]

Finland caved in (or rather gleefully embraced the possibility for higher tax incomes) a couple of years ago. For a sailboat owner like me nothing much has changed. The fuel price went up from 90 cents to 1 euro 25 cents (and is now at 1 euro 50 cents) but tyhat doesn't bother me, who use less than 100 litres per summer. It is much worse for the owners of fuel guzzling three story wave creating monster boats that use thousands upon thousands of litres per summer, but I despise those gits anyway, so I will gladly pay a little more as long as they suffer... >

 

One potential problem arises if the coast guard or police decides to take a sample from my tank and check what I'm running on. The turnaround in the tank is slow enough that it will surely contain traces of the old diesel for a year or two yet. This could mean that they can fine me a ridiculous sum of money plus slap on a recessive tax that could amount to a sizable portion of what my boat is worth... explanations and pleadings would probably work just as well as ever. Luckily I have yet to hear of anyone ever being harrassed in this way, at least in Finland. Bob knows what will happen to us this summer if we sail to Estonia, Latvia or other countries (Sweden doesn't count as another country, nobody even bothers to announce their arrival from Finland to the authorities there anymore. I tried once, just to check my VHF and rthe answer was in the line of "...ok, well, have a nice stay..."

[bargemast]

Having 2 tanks, is the easiest solution, as long as they are not connected together, as that is illegal too.

 

Like idleness wrote, you should be on the higher taxed part of the fuel for propulsion anyway, and with the 2 different coulored fuels, there is no room for fiddles anymore.

 

Peter.

[magpie patrick]

personally I cant see the problem.

We have to use 100% for propulsion when we are moving, the 60/40 or whatever percentage is declared is to allow for heating/generation.

Red at 100% is more expensive that white so why is everybody complainging unless of course they are on the fiddle.

Those that have petrol powered boats have to pay full duty and always have.

Those with sense will or already have fitted a second tank to use red for heating etc.

 

We will be on white for propulsion within two years so better get prepared.

 

That is to overlook one of the reasons why the government took this course of action in the first place. Commercial vessels are allowed to use red diesel and that has never been challenged. There are areas where the predominant supply is for commercial vessels (admittedly not on the inland waterways) and in these areas the suppliers are unlikely to want to have two pumps and they could effectively become a no go area for leisure boaters. The West Coast of Scotland is one example

[Timleech]

What's the position in the Irish Republic?

I had the impression that their arrangement was similar to ours, but with green rather than red diesel, or have I misunderstood?

 

Particularly relevant because apart from coast-hopping it's possible to cross the border with the UK on inland waters.

 

Tim

[Roger Gunkel]

That is to overlook one of the reasons why the government took this course of action in the first place. Commercial vessels are allowed to use red diesel and that has never been challenged. There are areas where the predominant supply is for commercial vessels (admittedly not on the inland waterways) and in these areas the suppliers are unlikely to want to have two pumps and they could effectively become a no go area for leisure boaters. The West Coast of Scotland is one example

 

That will make it difficult for owners of high fuel consumption boats, although those type of boats mayl be less inclined to take on cruising in the more isolated coastlines due to the rapidly increasing costs anyway. Sailing boats with auxiliary engines will be less effected by the unavailability of fuel as they will be able to use far less and will carry enough reserves in spare cans to refuel the smaller tanks if neccessary.. My own small motorsailer for instance only carries 100 ltrs in the tank, but also only uses about 1.2 ltrs per hour.

 

Roger

[GUMPY]

That is to overlook one of the reasons why the government took this course of action in the first place. Commercial vessels are allowed to use red diesel and that has never been challenged. There are areas where the predominant supply is for commercial vessels (admittedly not on the inland waterways) and in these areas the suppliers are unlikely to want to have two pumps and they could effectively become a no go area for leisure boaters. The West Coast of Scotland is one example

I havent over looked it

Doesnt apply to inland waterways.

Its the reason this ill thought out fudge came about in the first place.

Mainland EU seem to manage OK with two fuels why cant GB?

Oh I forgot the "vested intrests" dont want to spend the money to sort out this problem once and for all.

I do have two tanks second one fitted in 2005 in prepartion for the divide.

[bargemast]

That is to overlook one of the reasons why the government took this course of action in the first place. Commercial vessels are allowed to use red diesel and that has never been challenged. There are areas where the predominant supply is for commercial vessels (admittedly not on the inland waterways) and in these areas the suppliers are unlikely to want to have two pumps and they could effectively become a no go area for leisure boaters. The West Coast of Scotland is one example

 

 

If the suppliers have the choice between having clients or not, they will surely invest in a second pump.

 

Until now, because of the 40-60 rule, there was no need for them to do so, but I don't think that they would happily let their business loose the sale of the white diesel.

 

For bigger quantities (500 or more liters) you can surely get a tanker-lorry to deliver, possibly devided between a few boats, if people are a bit organised.

 

Peter.

[Biggles]

This if course would be great if white diesel was easily available at marinas. I bet there is less than a handful of such anywhere in the country either costal or inland. On top of that who is going to want to bunker 2 types of fuel, where does the "illegal" fuel get disposed of one on the continent, how much pollution is going to occurs when buying white from the forecourt and transferring to the boat?

 

Bloody Eurocrats I bet it's costing mo to sort out than it will ever bring in in revenue.

[mayalld]

If the suppliers have the choice between having clients or not, they will surely invest in a second pump.

 

If 90% of their business is selling red diesel to commercial vessels 250l at a time, will they invest in a second pump to supply the remaining 10% 50l at a time?

 

For some merchants, the leisure trade is only worth servicing because they already have the infrastructure for the commercial trade. It won't be worth investing in additional hardware to retain it.

[simon&jan]

Sorry to but in ere, would this be a good time to get 2nd tank fitted in preperation , or is it best to not think about it yet, will the price level out or is it just gonna keep going up untill no one can afford it anymore ???

[bargemast]

If 90% of their business is selling red diesel to commercial vessels 250l at a time, will they invest in a second pump to supply the remaining 10% 50l at a time?

 

For some merchants, the leisure trade is only worth servicing because they already have the infrastructure for the commercial trade. It won't be worth investing in additional hardware to retain it.

 

 

Commercial vessels overhere will be more likely to take 2500 ltr, or more, and one place not too far from where I am will probably sell at least 25.000 ltr per day of red, but they still went to the trouble of installing specially for the pleasure boats a white diesel installation, and I'm sure that their installation was quickly paid for by the ammount of diesel sold.

 

I don't think somehow that many of these will only take on 50 ltr a go, but even if they did, there are plenty of pleasure boats to still make it worth the investment, and saves pleasure boaters the hassle of jerrycans from a (cheaper) road-side supplier.

 

Peter.

[David Schweizer]

I doubt that many inland marinas and boatyards will go to the expense of supplying two fuels. It is not as simple as just installing a second pump. It will also involve installing a second tank, the cost of which could take quite a few years to recover, given the comparatively low turnover that they have. I also suspect that if surface tanks were installed for white diesel, there would be a significant number of thefts from unsupervised tanks in often fairly isolated locations.

 

I is my guess that if the Government did concede to white diesel for recreational boats, that some boatyards will not sell it at all, and some will have their red diesel tanks flushed out and sell only white diesel, either way we will loose out.

 

I remember when the EU concession permitting paraffin to be sold in imperial quantities was withdrawn, and although it only required the pumps to be re-calibrated (sometimes invoving the istallation of a new metering system), all the suppliers in our area stopped selling paraffin because the low turnover did not juistify the cost involved.

Edited March 2, 2012 by David Schweizer

[Proper Job]

I think the main risk is that inland boat yards will stop selling diesel altogether.

 

Compared to your average roadside garage, they turn over next to nothing. They will not be able to buy it at the same rates as the roadside garages and it will therefore be way more expensive.

 

If the price differential is to much, boat owners will buy it from roadside garages and decant it in to their boats.

 

From that point on, it's a death spiral. The marina's sell less, the price goes up. Eventually, it's more hassle than it's worth.

[Justme]

 

Those with sense will or already have fitted a second tank to use red for heating etc.

 

 

 

Technically that should be yellow IE domestic heating fuel.

[jonathanA]

we're too honest

 

we should adopt the french attitude- tell the eu we've done it and carry on as is...

 

there is no doubt that many suppliers aren't going to install a second tank and all that so many will just stop selling any diesel at all...

 

not good !

[Proper Job]

we're too honest

 

we should adopt the french attitude- tell the eu we've done it and carry on as is...

there is no doubt that many suppliers aren't going to install a second tank and all that so many will just stop selling any diesel at all...

 

not good !

In this case, they actually play the game.

 

When my folks refuel in France, they have to jump through all sorts of hoops to get red diesel for a pleasure boat.

[Dominic M]

I think the answer is surely, "Don't do anything until and if the regulations change."

 

The two tanks business is not really a solution. One thing that came out of this originally was the fact that retrospectively installing a second tank in a narrow boat was not a practical option in many cases. Secondly, it is accepted that running an engine is not necessarily only for propulsion. And I know of one supplier who only sells at the domestic rate who convinced HMRC that this was legitimate, as the boat engines need to run for several hour to recharge the batteries, and whether or not the boat was moving at the time was secondary. He claims that they accepted this logic.

 

HMRC's advice about travelling to other EU member states is the only practical solution they can possibly offer. They have no jurisdiction in, say, Belgium, where this problem first arose. If the Belgian authorities choose to act against people who have red diesel in their boat tanks which they bought legitimately in the UK, there is not a lot that HMRC can do about it.

 

It seems so damn petty though, and sometimes the Eurocrats really don't do themselves any favours at all.

[Chris Pink]

And the douane take a very active interest in what's in your tanks

[carlt]

we're too honest

 

we should adopt the french attitude- tell the eu we've done it and carry on as is...

 

That's quite funny, considering how open to abuse the UK "split" system is.

[David Mack]

The two tanks business is not really a solution. One thing that came out of this originally was the fact that retrospectively installing a second tank in a narrow boat was not a practical option in many cases. Secondly, it is accepted that running an engine is not necessarily only for propulsion. And I know of one supplier who only sells at the domestic rate who convinced HMRC that this was legitimate, as the boat engines need to run for several hour to recharge the batteries, and whether or not the boat was moving at the time was secondary. He claims that they accepted this logic.

 

Even without that logic (which seems to me to be pushing things too far), with the current setup you can declare your propulsion split on the basis that electricicty and hot water produced by your propulsion engine are duty free, as is heat from a diesel-fired heater. But with two tanks you will only be able to use red/yellow for your diesel heater. The electricity and hot water from your engine will come from the full-duty fuel. So a higher proportion of your fuel will be at the full duty rate.

 

This will be an incentive to use a separate petrol or diesel generator, rather than the main engine.

 

David

[bargemast]

Even without that logic (which seems to me to be pushing things too far), with the current setup you can declare your propulsion split on the basis that electricicty and hot water produced by your propulsion engine are duty free, as is heat from a diesel-fired heater. But with two tanks you will only be able to use red/yellow for your diesel heater. The electricity and hot water from your engine will come from the full-duty fuel. So a higher proportion of your fuel will be at the full duty rate.

 

This will be an incentive to use a separate petrol or diesel generator, rather than the main engine.

 

David

 

 

Probably the best thing to do anyway, as using a propulsion engine just to charge the batteries, is not going to make the engine work hard enough, and will be, apart from adding hours on the clock, asking for glazed bores in the long run.

 

Peter.