Tax on propulsion diesel

[MtB]

I think there is a big difference what we pay on the canals to what some Thames yards are charging

 

Have you checked the site rent on a Thames yard?

 

It staggers me some here resent a business making a profit.

[Mal in Somerset]

See Hmrc notice 554 para 3.10. Are you buying white diesel (derv) or marked "red" diesel. White diesel currently costs around 85 - 90ppl including duty plus VAT at 20%. Red diesel attracts a duty rate rebate of around 12ppl bringing the cost down to around 70ppl.VAT on red diesel is 5%. However if you are using red diesel for propulsion purposes there is an additional duty of around 47ppl. It is up to the boat owner to self declare how much is for propulsion but you need to find out whether you are buying red or white diesel first!. I believe this is correct but please fèel free to correct me.

Edited August 18, 2015 by Mal in Somerset

[Hawkmoth]

Has anyone been 'done' for not declaring and just using domestic for propulsion? I thought there was an understanding that the government would not pursue folk because they didn't agree with the tax but had to implement because the eu took them to court over it.

Bob

[bottle]

The answer to both is no. As far as I know

 

When it all started I believe it was said that if any one declared 60.40 ( standard, agreed declaration) then the inland revenue would accept that an not investigate but reserved the option to investigate if any other split was declared.

[Southern Star]

 

Never worked our boat out very accurately, but have roughly reckoned about 10 mpg, so will try from next full tank.

Cheers.

On the three fill-ups I did since I went away on 29th June, I averaged between 0.62 and 0.74 litres per engine hour (we checked the accuracy of the engine hour meter against the timer on a mobile phone and it is at least 99% accurate). Each time, I extrapolated this against the distance covered according to CanalPlan. All in all, I covered 360 miles which is, I think, enough to get a fairly accurate picture.

 

Once started, I do tend to leave the engine running all day, even when queueing at locks for an hour or so, and I do occasionally run the engine to heat the water and charge the batteries if I moor somewhere for the day due to bad weather. But overall I calculated fuel consumption at somewhere between 7 and 8 miles to the gallon, it's a 42' boat with a BMC 1.5 engine.

[Mal in Somerset]

Our boat is entirely powered by diesel with the exception of the cooker. The engine needs to run for approximately 3 to 4 hours a day to fully charge the batteries and run things like washing machine etc. Any travelling we do must surely be incidental to domestic use??? I normally declare 20/80 but wouldn't see anything wrong with 100 domestic ???

[ditchcrawler]

 

Have you checked the site rent on a Thames yard?

 

It staggers me some here resent a business making a profit.

I have no problem with making a profit, but feel that some are charging a lot more than necessary for a captive audience.

[David Mack]

Our boat is entirely powered by diesel with the exception of the cooker. The engine needs to run for approximately 3 to 4 hours a day to fully charge the batteries and run things like washing machine etc. Any travelling we do must surely be incidental to domestic use??? I normally declare 20/80 but wouldn't see anything wrong with 100 domestic ???

Travelling may be incidental, but you still have to pay the tax on it - unless you are a static houseboat.

[dmr]

On the three fill-ups I did since I went away on 29th June, I averaged between 0.62 and 0.74 litres per engine hour (we checked the accuracy of the engine hour meter against the timer on a mobile phone and it is at least 99% accurate). Each time, I extrapolated this against the distance covered according to CanalPlan. All in all, I covered 360 miles which is, I think, enough to get a fairly accurate picture.

 

Once started, I do tend to leave the engine running all day, even when queueing at locks for an hour or so, and I do occasionally run the engine to heat the water and charge the batteries if I moor somewhere for the day due to bad weather. But overall I calculated fuel consumption at somewhere between 7 and 8 miles to the gallon, it's a 42' boat with a BMC 1.5 engine.

 

What engine have you got and how big is the boat? These are very good figures. Most boaters claim a figure of about 1.5l/hour, with slow revving engines returning about 1l/hour.

 

..............Dave

[robert anthony]

On the three fill-ups I did since I went away on 29th June, I averaged between 0.62 and 0.74 litres per engine hour (we checked the accuracy of the engine hour meter against the timer on a mobile phone and it is at least 99% accurate). Each time, I extrapolated this against the distance covered according to CanalPlan. All in all, I covered 360 miles which is, I think, enough to get a fairly accurate picture.

 

Once started, I do tend to leave the engine running all day, even when queueing at locks for an hour or so, and I do occasionally run the engine to heat the water and charge the batteries if I moor somewhere for the day due to bad weather. But overall I calculated fuel consumption at somewhere between 7 and 8 miles to the gallon, it's a 42' boat with a BMC 1.5 engine.

[Mal in Somerset]

Travelling may be incidental, but you still have to pay the tax on it - unless you are a static houseboat.

Travelling may be incidental, but you still have to pay the tax on it - unless you are a static houseboat.

Yes I agree but on what basis??

 

Mileage - no Engine hours- no too.

 

Perhaps I can buy a meter which will tell me how much of the power input/

output is moving me forwards ( does backwards count) and how much is cleaning my underwear???

[Boat&Bikes]

Have you checked the site rent on a Thames yard?

 

It staggers me some here resent a business making a profit.

With you on this.

 

Ian.

[MtB]

I have no problem with making a profit, but feel that some are charging a lot more than necessary for a captive audience.

 

 

I still don't get it. Who are you to define a 'necessary' profit? Do you have access to their trading and profit and loss accounts?

 

How much profit on fuel sales is 'necessary' in your opinion for a business proprietor who has invested say, £2m in stock, equipment, fitting out the site etc and has to shell out perhaps a further £100k a year in rent, business rates, wages and other fixed overheads?

[Bod]

I believe the 60/40 split was mearly an example givern by HMRC, when this all first came into being.

It's now being taken as "gospel" by every one!

If you take how much of your engine HP/KW is actually passed into the water, via the propeller, a split of 10/90 is probably realistically accurate.

 

30HP engine at just above tick over produces what 10HP?

How much of that 10HP is used to turn the alternator, water pump, lost in heat through the skin tank?

How efficient is a propeller at transferring power?

Comments please.

 

Bod

[Ricco1]

I suspect that at the moment it's pretty well a free for all. If all boaters declared 10% propulsion only I very much doubt that anything would change. Does the government have have the time and inclination to get into disputes with boaters over what is, in the scheme of things, a tiny sum? I very much doubt it.

[alan_fincher]

See Hmrc notice 554 para 3.10. Are you buying white diesel (derv) or marked "red" diesel. White diesel currently costs around 85 - 90ppl including duty plus VAT at 20%. Red diesel attracts a duty rate rebate of around 12ppl bringing the cost down to around 70ppl.VAT on red diesel is 5%. However if you are using red diesel for propulsion purposes there is an additional duty of around 47ppl. It is up to the boat owner to self declare how much is for propulsion but you need to find out whether you are buying red or white diesel first!. I believe this is correct but please fèel free to correct me.

 

You pat 5% VAT on everything, including the duty, whether this be the duty at the lower rebated "non propulsion" rate, or the full duty for propulsion. By the time the two duty rates have had this VAT added to them, the price difference per litre rounded should be about 50p, if the duty ratesa re as they are when I last did the sums.

 

If an outlet has a price difference that isn't about 50p different between the two uses, as some have suggested, it is effectively charging you a differnt starting price for the fuel before any duty or VAT is added. Probably not illegal, but hard to justify!

[mayalld]

Our boat is entirely powered by diesel with the exception of the cooker. The engine needs to run for approximately 3 to 4 hours a day to fully charge the batteries and run things like washing machine etc. Any travelling we do must surely be incidental to domestic use??? I normally declare 20/80 but wouldn't see anything wrong with 100 domestic ???

 

Actually, the travelling isn't incidental, because the fuel consumption for an hours static running and an hours cruising isn't the same.

 

I use a series of assumptions about fuel consumption in different circumstances. Those assumptions are clearly open to dispute (but overall correspond with how much fuel I use;

 

• Running the engine whilst stationary to chareg batteries - 1 litre per hour
• Running the engine whilst moving with charged batteries - 1 litre per hour
• Running the engine whilst moving with discharged batteries - 1.5 litres per hour
• Running the bubble stove 0.5 litres per hour.
• Time taken each day to charge the batteries sufficiently that fuel consumption drops - 2 hours.

So, my usage in litres each day (assuming that I actually cruise for a couple of hours minimum) is;

 

Propulsion:

Hours run whilst moving

 

Domestic:

1 + hours run whilst moored +(stove hours/2)

[Machpoint005]

I have no problem with making a profit, but feel that some are charging a lot more than necessary for a captive audience.

 

You're not just paying for the fuel, you are paying for the fuel to be in a convenient place for you.

Patronise the services of your local fuel boat and let them make the profit!

[GreyLady]

This is a random question but if a boater was to declare a 65 % propulsion 35% Domestic is that quite acceptable and reasonable given the fact that the Boat was only actually under propulsion for around 15 hours a week and stationary in a Marina the rest of the week during the summer.

 

I would not like any hassle from the vat people.

[Southern Star]

This is a random question but if a boater was to declare a 65 % propulsion 35% Domestic is that quite acceptable and reasonable given the fact that the Boat was only actually under propulsion for around 15 hours a week and stationary in a Marina the rest of the week during the summer.

 

I would not like any hassle from the vat people.

Yes, perfectly reasonable, in fact I'd say you'd be declaring more propulsion use than 99% of boaters.

[mayalld]

This is a random question but if a boater was to declare a 65 % propulsion 35% Domestic is that quite acceptable and reasonable given the fact that the Boat was only actually under propulsion for around 15 hours a week and stationary in a Marina the rest of the week during the summer.

 

I would not like any hassle from the vat people.

 

perfectly reasonable.

 

In fact, seriously honest when HMRC have said that if you declare 60% propulsion, they will believe you "no questions asked"

[GreyLady]

 

perfectly reasonable.

 

In fact, seriously honest when HMRC have said that if you declare 60% propulsion, they will believe you "no questions asked"

 

Thank you for that mayalld.

 

[Dave Payne]

Last time i filled up i am sure he said he had to be 80% propulsion and 20% domestic or i would have to fill a form out!

[OldGoat]

I believe the 60/40 split was mearly an example givern by HMRC, when this all first came into being.

It's now being taken as "gospel" by every one!

If you take how much of your engine HP/KW is actually passed into the water, via the propeller, a split of 10/90 is probably realistically accurate.

 

30HP engine at just above tick over produces what 10HP?

How much of that 10HP is used to turn the alternator, water pump, lost in heat through the skin tank?

How efficient is a propeller at transferring power?

Comments please.

 

Bod

 

the 60/40 split owes more to the difference between the 'high street' price of fuel and that charged by waterside outlets.

A 'big white cruiser' is more likely to use 90% + for propulsion when he's creaming around the Solent..

 

The Revenue is nowadays more concerned about collecting 'income' than prosecuting small scale miscreants and don't have the resources (especially nowadays) to chase after inland boaters as the amounts would be small.

Whereas the P-takers (folks who cruise a lot, but claim 0% propulsion all the time) deserve a rap on the knuckles, anyone who is prepared to make a calculation and support it with reasonable facts should have nothing to fear.

 

I can't understand why folks get so wound up about it.

 

On another tack the disparity in prices - as with all things in the fuel business - is all about volume.

A filling station will take a tanker load 20,000 litres plus at a drop, whereas a boatyard 2,400 litres. The former may have 4 or five drops a week and the yard one per month. That accounts for the base price difference. It's all about 'netbacks'.

[Mac of Cygnet]

The attitude of boatyards and marinas also varies enormously. I have met:

 

"60/40 split? Fine. Sign here."

 

"60/40? Everybody round here is 20/80."

 

"How are you paying? Cash?"

 

"You don't want to buy it here. We charge full price only"

 

"That was all in cans, wasn't it? Basic price then." (20 litres of 60 was in a can)

 

"Basic price for your can. What declaration on the rest?"

 

"Can't be bothered with all that paperwork. That's 70p a litre."

 

"Cans make no difference. All 60/40 here"

 

And other variations in between.

 

Sometimes with no paperwork at all.

Edited August 19, 2015 by Mac of Cygnet