Red diesel

[bottle]

SNIP>>>>>>>>>>>>>>>>>>>>>..

 

The EU says that you can only have 2 rates of duty, and that boats must pay the higher rate.

 

Probably true, I can not dispute that as I do not have the facts and cannot be arsed to get them but if I remember rightly the EU said nothing about adding the 'road fuel' bit as well.

[saltysplash]

Are you saying that you could buy red fuel for propulsion and then red for heating from the same boat yard tank, but pay 2 different prices for exactly the same thing?

 

Thats basically it under the current proposals. As mentioned on previous threads, Keeps your receipts. They will show what duty you have paid and where from. No receipt and you could be in a bit of pooh if ever your stopped and the tank is dipped by our fine upstanding revenue inspectors

[valrene9600]

Thats basically it under the current proposals. As mentioned on previous threads, Keeps your receipts. They will show what duty you have paid and where from. No receipt and you could be in a bit of pooh if ever your stopped and the tank is dipped by our fine upstanding revenue inspectors

 

 

No way do i believe that customs&excise will allow fuel to be sold from the same tank at 2 different rates of duty.

The fiddle factor is to great.

[DHutch]

Steam coal anyone?

 

 

 

 

 

 

 

 

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[adam1uk]

No way do i believe that customs&excise will allow fuel to be sold from the same tank at 2 different rates of duty.

The fiddle factor is to great.

 

That does appear to be what the consultation document is suggesting. It's well worth a read if you've got a spare half hour, here

 

It's also clear that the Revenue won't make a great deal of effort to ensure everyone's complying. The consulatation makes the point that the additional revenue will be only around £10-15 million a year. Total yield from oils is £24 billion, so this would be only 0.06 per cent. The document says that enforcement effort must be proportionate to the risk -- which I take to mean that as there's not much income at risk, not much effort will be put into protecting it.

[Scotty]

I would guess the new rules are aimed at the 100ft sunseekers that happily burn gallons of diesel per hour.

Unfortunately the definition 'pleasure boats' includes all the little inland waterways boats too

[mayalld]

No way do i believe that customs&excise will allow fuel to be sold from the same tank at 2 different rates of duty.

The fiddle factor is to great.

 

That is what they are suggesting.

 

Basically, they are looking for the least cumbersome way possible of implementing this dictat from the EU.

 

The revenue that they expect to gain is so miniscule as to not be worth chasing after, but the fine from the EU for ignoring the dictat is worth avoiding.

 

So, they have come up with a scheme that will

1) Get the revenue in a fair bit of the time.

2) Show the EU that they have done it.

3) Be easy to avoid for those who choose to do so.

 

At worst, avoidance will cost them about a million quid, and it just isn't going to be worth their while trying to chase it.

[adam1uk]

At worst, avoidance will cost them about a million quid, and it just isn't going to be worth their while trying to chase it.

 

At worst, avoidance will cost them £10 to £15 million, as I said a couple of posts up (quoting the consultation paper).

[carlt]

At worst, avoidance will cost them £10 to £15 million, as I said a couple of posts up (quoting the consultation paper).

Much bigger cost to the public purse than licence avoidance then eh?

[mayalld]

At worst, avoidance will cost them £10 to £15 million, as I said a couple of posts up (quoting the consultation paper).

 

No, that is the total revenue to the exchequer.

 

It would only cost them that is EVERYBODY avoided payment.

[adam1uk]

Much bigger cost to the public purse than licence avoidance then eh?

Actually it won't be a loss at all compared to the situation now, as they currently get nothing from this source because it doesn't exist. If they get any revenue at all, it'll be a gain.

It would only cost them that is EVERYBODY avoided payment.

Isn't that the meaning of "at worst"?

[mayalld]

Isn't that the meaning of "at worst"?

 

In this context, no.

 

If they did nothing about everybody avoiding payment, then the EU would fine them, so £10m-15m in lost revenue would also equal a hefty EU fine.

 

They will lean on the waterside suppliers to comply, and lose about a million from the expected revenue due to people buying red off the cut. It will not be cost effective to chase the avoidance.

[Scotty]

Is anybody successfully using homebrew 'chip fat diesel' in their boats?

[David Schweizer]

I have not been following all this too closely and am beginning to question whether my assumed facts are actually correct. Could someone please help clarify these for me.

 

1. Is the the Red Diesel (TVO?) currently used by farmers in their tractors the same as the red diesel sold for use in boat engines, and is it excemt from tax?

 

2. Will TVO be excempt from the new tax requirements when Marine Diesel derogation expires?

 

3. After derogation expires, will TVO remain the same as Red (Marine) Diesel being sold for use in boats, or will some additional dye be added to differentiate them?

Edited August 8, 2007 by David Schweizer

[carlt]

I have not been following all this too closely and am beginning to question whether my assumed facts are actually correct. Could someone please help clarify these for me.

 

1. Is the the Red Diesel (TVO?) currently used by farmers in their tractors the same as the red diesel sold for use in boat engines, and is it excemt from tax?

 

2. Will TVO be excempt from the new tax requirements when Marine Diesel derogation expires?

 

3. After derogation expires, will TVO remain the same as Red (Marine) Diesel being sold for use in boats, or will some additional dye be added to differentiate them?

 

1. yes and yes

2. yes

3. Nobody knows but I don't see them retaining the red for marine use when the duty is the same as white.

[david and julie]

I have not been following all this too closely and am beginning to question whether my assumed facts are actually correct. Could someone please help clarify these for me.

 

1. Is the the Red Diesel (TVO?) currently used by farmers in their tractors the same as the red diesel sold for use in boat engines, and is it excemt from tax?

 

2. Will TVO be excempt from the new tax requirements when Marine Diesel derogation expires?

 

3. After derogation expires, will TVO remain the same as Red (Marine) Diesel being sold for use in boats, or will some additional dye be added to differentiate them?

 

I thought TVO (Tractor Vaporising Oil) was a blended petrol(with kerosine?) rather than diesel?

 

Very rarely used now this fuel, probably just for vintage Fergies and the like.

[carlt]

I thought TVO (Tractor Vaporising Oil) was a blended petrol(with kerosine?) rather than diesel?

 

Very rarely used now this fuel, probably just for vintage Fergies and the like.

Quite right. Too much typing, though, when David knew what he meant. Marine red is identical to agricultural red, TVO recipes vary as much as opinions on G. Isolators.

[bristol & argo]

I have not been following all this too closely and am beginning to question whether my assumed facts are actually correct. Could someone please help clarify these for me.

 

1. Is the the Red Diesel (TVO?) currently used by farmers in their tractors the same as the red diesel sold for use in boat engines, and is it excemt from tax?

Yes, (but Tractor Vaporizing Oil is something different and normally a home made concotion for very old tractors) Red diesel is normally called Gas Oil, and is used by farmers, all the construction industry, generators, rollers, mobile compressors, excavators etc. You pay about 8ppl to the chancellor at the moment.

 

2. Will TVO be excempt from the new tax requirements when Marine Diesel derogation expires?

TVO is covered by different regs, being a homemade concotion of other things that have duty paid on some of it's parts.

Gas Oil (red diesel) for all other uses remains as now.

 

After derogation expires, will TVO remain the same as Red (Marine) Diesel being sold for use in boats, or will some additional dye be added to differentiate them?

It appears The Revenue is proposing no change to the liquid, as the retailor will apply the correct rate of duty at the time of sale.

The retailors allready have to register and record certain details of most sales, but most sales direct into boats of relatively small quantities don't apply. I expect this will change and every sale will have to be recorded. The Revenue take a very dim view of evasion and the fine would probably put a retailor out of business if they catch them not charging the correct rate, so expect to have to sign a disclaimer if you have a seperate tank for heating fuel.

 

The cost of enforcement won't be much, they will look at the existing oil returns, and only visit the ones not sending them large enough cheques for the higher duty that should have been collected.

 

Basically, they arn't looking to catch the users , they will be after the suppliers.

 

Simon.

[carlt]

Also, I hear, if you scan a licence and change the boat name and number, you can't tell the difference

[mayalld]

I have not been following all this too closely and am beginning to question whether my assumed facts are actually correct. Could someone please help clarify these for me.

 

1. Is the the Red Diesel (TVO?) currently used by farmers in their tractors the same as the red diesel sold for use in boat engines, and is it excemt from tax?

 

2. Will TVO be excempt from the new tax requirements when Marine Diesel derogation expires?

 

3. After derogation expires, will TVO remain the same as Red (Marine) Diesel being sold for use in boats, or will some additional dye be added to differentiate them?

 

1) The red diesel used by farmers is the same as the red diesel that we use, and attracts the same lower duty.

 

2) It will continue to be duty exempt.

 

3) The two versions will remain the same, and it will be impossible to tell whether the red in your tank is duty paid or not.

 

Incidentally, Red Diesel and TVO are very much NOT the same thing.

 

TVO was withdrawn from commercial sale in 1974, and only very old tractors use it.

 

A bit of petro-chemistry follows which should explain the various fuel grades!

 

There are two basic fractions of crude oil which come under the general heading of "fuel oil" or "heavy oil"

 

28 second - Kerosene / Domestic Heating Oil (20 octane)

35 second - Diesel / Gas Oil (zero octane)

 

The second number is a measure of viscosity, and relates to the time taken for a ball bearing to fall through a specified distance.

 

From these basic fractions other fuels are derived.

Domestic Paraffin (lamp oil) is derived from 28 second kerosene by driving off the aromatics, leaving a zero octane residue.

TVO was made by taking the aromatics removed to make lamp oil, and adding them to 28 second kerosene, creating an enriched kerosene with an octane rating of 55-70

 

TVO burning vehicles are now run on a home made mixture consisting 15% unleaded petrol, 10% gas oil, and 75% kerosene.

[David Schweizer]

3) The two versions will remain the same, and it will be impossible to tell whether the red in your tank is duty paid or not.

 

So anyone with friendly farmer in the family could arrange for the odd jerry can or two to find their way into their boat, and there is no way the inspectors would know.?

[carlt]

3) The two versions will remain the same, and it will be impossible to tell whether the red in your tank is duty paid or not.

Is this not merely speculation and, from the number of people on just this forum who think it ok to dodge this particular tax, but a mortal sin to dodge others, I don't think it will be very long before mr. tax collector sews up a few loopholes.

[Paul H]

I predict a boom in:

 

Diesel heating stoves

Retro-fitted "heating diesel tanks" placed at a higher level than "propulsion diesel" tanks.

Plastic tubing

 

But do we actually know that red diesel used for heating in boats will not be taxed at the full rate? I can see the exemption for residential boats (although residential status may have to be proved - tricky for all the unnofficial liveaboards) but will this apply to lesiure boaters? Boaters already pay 17.5% VAT on electricity in marinas rather than the 5% domestic rate because they are seen to be using it as a part of a leisure activity. Are RV users with Eberspachers and lorries with sleeper cabs able to use red diesel for heating?

 

I'm not sure that we can assume too much yet.

 

Paul

[carlt]

Are RV users with Eberspachers and lorries with sleeper cabs able to use red diesel for heating?

 

I'm not sure that we can assume too much yet.

 

Paul

 

It depends if it's worthwhile. Truckstops have a red diesel pump for wagons with separate tanks, but I believe this is largely for refrigeration units, they are exempt from the fuel tax.

[adam1uk]

I'm not sure that we can assume too much yet.

Of course we can't, because no decisions have been made. People have until 31 October to submit reposnses to the consultation paper.

Is this not merely speculation and, from the number of people on just this forum who think it ok to dodge this particular tax, but a mortal sin to dodge others, I don't think it will be very long before mr. tax collector sews up a few loopholes.

I'm not sure I've seen anyone saying it would be OK to dodge the tax. I do think, however, that there won't be a huge effort on the part of HMRC to enforce it. They'll probably try to make an example of a couple of people, probably retailers, but they've got much bigger fish to fry. My reason for thinking this is this paragraph in the consultation paper, which emphasises how small the yield would be, and how the effort must be proportionate:

We estimate that the revenue gain from the expiry of the boat derogation isin the area of £10 to £15m a year. It follows that this is the maximumadditional revenue at risk from private boating if, for example, boat ownerswere allowed to continue using red diesel but misused the scheme by(depending on the option adopted) misleading RDCO suppliers as tonature of their boat (ie commercial/ domestic), failing to submit returns orsubmitting false repayment claims. HMRC’s enforcement effort must beproportionate to this risk. Taken in the context of a total yield of £24bn14(05/06) from oils, the private pleasure craft industry would account for0.06% of the total revenue.