Sunday 2nd March 2008
The RYA and BMF (British Marine Federation) can now confirm that the key features of the new scheme for charging duty on marine diesel to be introduced by Her Majesty’s Revenue and Customs (HMRC) with effect from 1 November 2008 will be:
• Private users can continue to use marked fuel (red diesel) providing they make a simple declaration to the supplier and pay the full duty rate for heavy oil;
• Registered Dealers in Controlled Oils (RDCOs) will be responsible for declaring the duty collected to HMRC; and,
• Fuel purchased for domestic use (i.e. not for propulsion of the craft) can continue to be purchased at the rebated rate.
HMRC have yet to issue a public statement but have released to the RYA its Impact Assessment which is available in related links above.
Under the new scheme, HMRC envisage that boaters will ‘self declare’ whether they are a commercial or recreational vessel and recreational vessels will pay the full duty rate. Fuel used for heating purposes on board will continue to be sold at the rebated rate of duty and the retailer will take the owner's word, again based on self declaration, on what proportion is for heating or lighting and what is for propulsion.
Dave Fitzgerald, HMRC confirmed that the core policy had been fixed but that they would be working closely with RYA, BMF and other stakeholders in relation to developing the detail of the declaration process and apportionment of fuel for domestic use. Following that consultation process, HMRC will produce comprehensive guidance.
Neil Northmore, the RYA’s Government Affairs Advisor, said: “Since the decision was made to charge a higher rate of duty on red diesel, which required a new regime, we have been working hard with HMRC to find a sensible solution for all.
“Our main concerns were availability and safety, and we were aware that there was a danger that some retailers in more remote areas would simply not bother selling to pleasure boats on the premise that it would be more trouble than it was worth to distinguish between private and commercial craft, and then process the paperwork.”
The onus will be on the owner of the boat to self-declare whether they are a commercial or recreational vessel and pay the appropriate rate of duty at the pump. Anyone falsely declaring they own a commercial vessel may be subject to enforcement action by Her Majesty’s Revenue and Customs.
Howard Pridding, Executive Director of the British Marine Federation, said:
“While no-one is going to pretend that the duty increase on red diesel is a good thing, we are pleased with how HMRC has managed the consultation process and the position that they have finally adopted. There were real fears that the marine industry would be hit with significantly increased costs and administrative burdens but HMRC has listened to our concerns and come up with a system which the BMF feels able to support.
“The proposed system spreads the burden between boaters and the industry in a fair way and hopefully will ensure that, with the industry able to keep the existing infrastructure, boaters will still be able to access fuel in convenient locations.”
The campaign to secure future diesel supplies for recreational boaters has been running since 2003.
The RYA and BMFs work with the HM Revenue and Customs has been instrumental in ensuring diesel remains available, particularly in remote areas where the priority has always been supplying commercial vessels.
“This solution ticks many of the boxes for recreational boaters. Availability will not be affected, which gets rid of the safety concern, and the potential for reams of paperwork or even registration of craft, to identify commercial vessels from recreational ones, has been minimised” Neil added.
The only real remaining issue is how the impact of increased diesel prices will affect the marine leisure industry and participation. The RYA will continue to work with the Government to assess the impact of this.