"red diesel"

[MyLady]

I understand that fuel duty is only payable on fuel used for propulsion. Indeed, I have driven a refrigerated lorry that had two tanks: one for the engine; and one for the refridgeration plant. The latter tank was perfectly legally filled with "red diesel".

 

I gather that on boats with one fuel tank that one can declare how much fuel is used for propulsion and how much for domestic purposes. I intend/hope to run the engine for several hours on most days to move the boat, but this will also heat water in the calorifier, as well as charging the bank of domestic batteries. On days which I don't move it's likely I'll need to run the engine purely to heat water and give electricity, so it's definitely multi-purpose.

 

What I'd like to know is whether there are 'standard' allowances for this and if so, please can you tell me what they are, or where to find them?

 

TIA,

 

Roger

 

[Ex- Member]

It is said that generally a 60/40 split is acceptable in favour of propulsion. We choose to claim 80/20 in favour of generation. A lot will depend on how you use your boat.

[MtB]

Roger,

 

When you buy your diesel you are entitled to specify your intended ratio of domestic to propulsion use, and pay tax accordingly. The retailer looks it up on a chart.

 

Some retailers can't be bothered and force you to declare 60%/40%.

 

MtB

[Ray T]

Usual to declare a 60 / 40 split to the fuel dispensing vendor. 60% propulsion 40% domestic.

 

Article here: http://www.motorboatsmonthly.co.uk/news/402702/red-diesel-60-40-split-confirmed

 

HMRC site: http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageExcise_ShowContent&id=HMCE_PROD1_029598&propertyType=document

[alan_fincher]

Firstly it is not strictly correct that there is no duty on the fuel you don't use for propulsion. There is actually a heavily rebated duty, but duty none-the less. Additionally fuel used in either way still attracts VAT, but only at 5%.

 

There is no fixed percentage - you declare on purchase what percentage of the fuel you expect will be used for propulsion, and the calculations are based on your declaration. The legal obligation is on you, when you make the declaration.

 

Except that (!)......

HMRC said when this was first brought in that they expected a typical split to be 60% propulsion and 40% "non propulsion" for many boat owners, (though not specifically canal boat owners).

This is not a split you are forced to declare in your own personal circumstances, but a number of canalside retailers have made the decision that they will only sell fuel to people who declare that particular split. This is legal, but unhelpful, and my advice is avoid those retailers, as they should be discouraged from the practice, (even if you intend to declare 60%/40%!). In most areas finding a supplier that doesn't influence your declaration should not be too hard.

[MtB]

It is said that generally a 60/40 split is acceptable in favour of propulsion. We choose to claim 80/20 in favour of generation. A lot will depend on how you use your boat.

 

If one's intended use was 80%/20% domestic/propulsion at the point of purchase, but one finds later this was an error and it all got actually used for propulsion, I wonder if this is just one's good luck....

 

MtB

[Ex- Member]

 

If one's intended use was 80%/20% domestic/propulsion at the point of purchase, but one finds later this was an error and it all got actually used for propulsion, I wonder if this is just one's good luck....

 

MtB

 

Mmmmm I wonder

[alan_fincher]

 

If one's intended use was 80%/20% domestic/propulsion at the point of purchase, but one finds later this was an error and it all got actually used for propulsion, I wonder if this is just one's good luck....

 

MtB

 

I think it is fairly clearly stated somewhere on the HMRC site that if you believe your actual usage differed wildly from an estimate that you made when you bought the fuel that you should adjust your declaration on the next purchase to reflect that.

 

I may be imagining that though.

 

Recently my suppliers seem to have been telling me what I'm declaring though, rather than me telling them, and I suspect this practice is not unique to me or my particular suppliers!

[dor]

Usual to declare a 60 / 40 split to the fuel dispensing vendor. 60% propulsion 40% domestic.

 

Article here: http://www.motorboatsmonthly.co.uk/news/402702/red-diesel-60-40-split-confirmed

 

HMRC site: http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageExcise_ShowContent&id=HMCE_PROD1_029598&propertyType=document

When I was dispensing diesel it was very rare for anyone to declare 60% propulsion. Even those who thought they should comply with the 60/40 split "mistook" the figures to mean 40% propulsion.

 

I think the 60/40 split was arrived at by HMRC in consultation with boat users of whom only a small proportion were narrowboaters. Most narrowboats tend to use much more for non-propulsion purposes than river cruisers.

[MtB]

 

Mmmmm I wonder

 

It's like an irregular verb. Good luck if i do it, naughty if you do it, and fraud if he does it....

 

 

MtB

[Bobbybass]

I declared 90/10 for years..

 

Nobody bothered to check..

 

One 'yard' I Filled up..said.."we sent them £14k for tax...and they sent it back and said 'what's it for'..".

 

Grab what you can...and walk away..

 

That's how I live my life.

 

 

Bob

[Ex- Member]

Our main diesel tank is over 200 gallons, it could be well over a year before we next fill up. Our 200L bow tanks we declare the max 100% on fuel generation.

[by'eck]

Roger,

 

When you buy your diesel you are entitled to specify your intended ratio of domestic to propulsion use, and pay tax accordingly. The retailer looks it up on a chart.

 

Some retailers can't be bothered and force you to declare 60%/40%.

 

MtB

 

Whilst others force upon you the 10/90% (propulsion/domestic) split having been told by HMR&C they are happy receiving this minimal level of duty.

[Bobbybass]

Our main diesel tank is over 200 gallons, it could be well over a year before we next fill up. Our 200L bow tanks we declare the max 100% on fuel generation.

 

Good-on-yah

 

(That's Russian you know)

 

Whilst others force upon you the 10/90% (propulsion/domestic) split having been told by HMR&C they are happy receiving this minimal level of duty.

 

Give em the minimum...

 

 

 

PS.

 

I was told several years back by HMRC...that you have to pay on the 'propulsion' part of your fuel.

When I queried them about being 'forced' to accept a 60/40 split their answer was :

 

If you keep full records...you have to pay on the propulsion part of the fuel.

If you overpay on the propulsion part...you are allowed ( with records) to adjust the ratio on the next time you fill up.

I asked this...and again it was clarified.

If you are 'forced' to pay 60/40 you can ( with records) next 'fill up'..top adjust...say.....50/50....40/60...to reclaim the part where you overpaid.

 

I did this at seasons end...and HMRC sent me a cheque for £95.

 

It is NOT a penalty..you have to pay on propulsion.

You can reclaim if you over pay..(with records)

 

Bob

Edited November 9, 2013 by Bobbybass

[MtB]

 

Whilst others force upon you the 10/90% (propulsion/domestic) split having been told by HMR&C they are happy receiving this minimal level of duty.

 

I've never encountered this. Care to name and shame?!!

 

MtB

[Bobbybass]

 

I've never encountered this. Care to name and shame?!!

 

MtB

 

Mr Boilerman...

 

Read my post..

 

This is not a 'penalty'...or a 'happy to receive this'.

 

You only have to pay on propulsion..

 

If you overpay...you can reclaim it...like any other tax....

It is NOT a penalty...or a kind gesture...

 

I have reclaimed it.

 

Others should to.

 

Bob

[Stilllearning]

Nice bit of information there Bob, I will remember that for the future.

[MtB]

 

Mr Boilerman...

 

Read my post..

 

This is not a 'penalty'...or a 'happy to receive this'.

 

You only have to pay on propulsion..

 

If you overpay...you can reclaim it...like any other tax....

It is NOT a penalty...or a kind gesture...

 

I have reclaimed it.

 

Others should to.

 

Bob

 

Calm down! You're the one who misunderstood.

 

I was inviting by'eck to name the vendors who "force" one to accept such a low propulsion proportion when the real proportion is much higher.

 

MtB

[Bobbybass]

 

Calm down! You're the one who misunderstood.

 

I was inviting by'eck to name the vendors who "force" one to accept such a low propulsion proportion when the real proportion is much higher.

 

MtB

 

Sorry Mr Boiler...didn't mean to sound agressive...

 

I queried the forced' split with HMRC and was told to adjust at seasons end...

They didn't see it as a big deal...just said that I had to pay tax on what I used for propulsion...and if I overpaid....I could just adjust..

When I left the boat..I submitted a claim..and they repaid me...

 

Bob

[MtB]

 

Sorry Mr Boiler...didn't mean to sound agressive...

 

I queried the forced' split with HMRC and was told to adjust at seasons end...

They didn't see it as a big deal...just said that I had to pay tax on what I used for propulsion...and if I overpaid....I could just adjust..

When I left the boat..I submitted a claim..and they repaid me...

 

Bob

 

That's cool. I think you should down some wine. This Tesco Finest Fleurie is proving surprisingly drinkable!. Recommended!

 

MtB

[Keeping Up]

 

That's cool. I think you should down some wine. This Tesco Finest Fleurie is proving surprisingly drinkable!. Recommended!

 

MtB

+1 for Tesco's Fleurie

[by'eck]

 

I've never encountered this. Care to name and shame?!!

 

MtB

 

Not sure where the shame comes in since they are offering diesel at fixed low price whilst apparently conforming to local HMR&C requirements.

 

I'm sure there are many more but Reedley and Lower Park marina's on the L & L offered red diesel on above basis.

 

I have also been offered fixed low price red diesel at Norbury Wharf without any question of split so assume they have/do also work on the same basis.

Edited November 9, 2013 by by'eck

[MtB]

 

Not sure where the shame comes in since they are offering diesel at fixed low price whilst apparently conforming to local HMR&C requirements.

 

I'm sure there are many more but Reedley and Lower Park marina's on the L & L offered red diesel on above basis.

 

I have also been offered fixed low price red diesel at Norbury Wharf without any question of split so assume they have/do also work on the same basis.

 

The 'shame' comes from encouraging boaters to under-declare - OUTRAGEOUS don't you think? (Rhetorical kwestion )

 

Norbury eh? I haven't been up that way for a couple of years. Might go soon and combine with a few pints of Banks's Mild in the pub not far opposite... YERM!

 

MtB

[bottle]

Whenever this topic pops up, it surprises me that people are still getting it wrong in how they present the declaration.

 

It is propulsion/domestic and the 60/40 is just a guide line that,HMRC said that if that is what is declared then they would not investigate but if any other declaration was made they retained the right to ask for proof of said use.

 

So no one need declare any ratio greater than 60/40 but if records are kept and you maintain proof you can declare lower ie. 20/80

 

If you have a separate tank for domestic it is quite proper to state 0/100 but that tank must be isolated from the propulsion tank.

 

Now, this is my interpretation that you can still declare a 60/40 (or whatever you decide) for the other tank, after all when the engine is running batteries are being charged and hot water produced (unless you have an air cooled engine )

 

Whatever you declare it is your responsibility and not the supplier.

 

 

I always check before filling if the supplier is happy to take my declaration, if not I move on.

[FadeToScarlet]

It is possible to buy all your fuel at the rebated (I.e. 0%) rate if you have a legit residential mooring:

 

"HMRC have recognised the status of residential boat owners whose primary residence is their boat. Some of these will be at fixed moorings or moved a very short distance along the towpath from permanent moorings to fuel. If they live aboard the craft permanently and hold certain documentation such as houseboat licence, residential mooring licence, council tax bill in respect of the mooring or other documentation that provides proof of permanent residency they may purchase all their fuel at the rebated rate. They will be required to make and sign a Declaration that zero percent of the fuel is for propelling purposes. It will be the responsibility of the residential boat owner to ensure they hold the requisite documentation should HMRC wish to check the validity of the declaration made in these circumstances."

 

Luckily some suppliers around here recognise that.