BREAKING NEWS STORY Skip says...


“Proposed Red diesel ban. Your views are sought.”


Red diesel propulsion ban consultation opened by UK government


The UK government intends to abolish the scheme introduced in 2008 that allowed users of diesel powered private pleasure craft, including yachts, narrowboats and motorboats to purchase red diesel and pay the duty differential between red and white diesel on the fuel used for propulsion.


The government intends to remove the right of operators of such craft to use red diesel for propulsion and mandate the use of white diesel in its place. Users will be allowed to continue to use red diesel for on-board non- propulsion use where they have a separate fuel tank for this purpose. This means that craft with only one tank will pay more tax than they currently do as they will have to purchase fuel taxed at the higher white diesel duty rate for both propulsion and non-propulsion uses, and pay the standard rate of VAT as white diesel is not eligible for the reduced rate of VAT.


HM Revenue and Customs has opened a consultation on the matter and is inviting views on, and seeking information about, the proposed changes to the rules for red diesel used in private pleasure craft as a result of the judgment of the Court of Justice of the European Union (CJEU).


In 2018, the CJEU ruled that the UK’s taxation rules for diesel used in private pleasure craft contravened the Fuel Marker Directive. The Directive is designed to ensure that any misuse of diesel crossing European Union internal borders can be detected given the variation in duty treatment in member states.


HM Revenue and Customs’ 8 week consultation sets out the changes the government intends to make to bring the UK’s practice into line with the Directive and seeks evidence about the impact of the changes on users of diesel powered craft and their fuel suppliers.


The consultation outlines how the government intends to implement the judgment by requiring private pleasure craft to use white diesel for propulsion, and seeks evidence regarding the impact this will have on users of diesel propelled craft.


The responses will be used to help determine whether a period will be required for suppliers, known as Registered Dealers in Controlled Oils (RDCOs), and users of diesel fuel to adapt to using only white diesel for propulsion of private pleasure craft and, if needed, the length of any such period.


Click to exercise your right to have your say as part of the consultation by going to https://bit.ly/2Gi6hTO. The consultation closes at 11:45pm on 9 September 2019.


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