HMRC agrees to continued use of red diesel
for non-propulsion purposes
The Inland Waterways Association has welcomed
the announcement by Her Majesty’s Revenue and Customs (HMRC)
that red diesel would be retained when the derogation on fuel
duty is removed in November this year, and that the lower rate
of duty would still be chargeable on fuel used for heating and
domestic purposes .
In a policy statement issued by HMRC on Friday
29 February it was announced that:
“Private pleasure vessels will continue to be permitted to use
marked fuel (red diesel) but at the rate for heavy oil, repaying
the rebated duty via the Registered Dealers in Controlled Oils (RDCOs)
who will declare this to HMRC. An allowance for domestic use
will be permitted.”
HMRC’s decision means that red diesel will be
retained, at two different rates of duty, a higher one for
pleasure craft using it for propulsion purposes, and a lower
rate for commercial purposes. Pleasure boaters should therefore
anticipate an increase in duty of around 47.25 pence per litre
extra from November when they fill up with diesel used for
propulsion purposes.
Despite the large increase in duty to be paid,
which was expected, there is some good news. IWA’s lobbying to
achieve a continued allowance for the use of low rate red diesel
for heating or other domestic purposes (other than propulsion)
has been accepted by HMRC. Boaters may therefore continue to use
red diesel purchased at the lower commercial rates of duty for
“domestic” purposes, e.g. heating and battery charging, even
though it may go into the same tank as the fuel used for
propulsion.
This decision by HMRC means that boaters will
now self certify at the point of purchase what proportion of the
fuel purchased is for domestic purposes, and the vendor will
charge and account for the duty due on the transaction
accordingly. Vendors will have to keep accurate records, in
order to declare the duty to HMRC.
HMRC maintain that vendors “will not be
required to verify the validity of declarations made to them by
users; they need only retain the declaration in their records to
support their own duty return to HMRC”. |
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