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Tony Davis · 04-03-2008, 07:40 PM

YA and BMF hail "common sense solution" to diesel increase for UK boaters

By IBI Magazine

According to a story on Motor Boats Monthly's website, the Royal Yachting Association (RYA) and British Marine Federation (BMF) have released a joint statement saying that the path chosen by HM Revenue & Customs (HMRC) to keep red diesel for leisure boaters but make them pay a top rate of duty (56.94 pence per litre) at the pump was the "common sense solution." MBM broke the news that HMRC had decided on this path after a period of consultation last year.

According to the website, UK boaters will have to pay more duty on fuel than any other non-commercial users in the country. Prices for diesel are expected to shoot to well over £1 per litre after November 1, 2008. VAT on this fuel will also jump from its rebated rate to a full 17.5%.

"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," said Howard Pridding, executive director of the BMF, in the statement.

The two organisations had worried that the government might stop recreational boaters from using commercial red diesel. That would force marinas and other diesel suppliers to change pumping equipment as well as force many boaters to modify or add new tanks to the boats in order to comply.

"There were real fears that the marine industry would be hit with significantly increased costs and administrative burdens," said Pridding. "But HMRC has listened to our concerns and come up with a system which the BMF feels able to support."

Pridding added that the proposed system "spreads the burden" between boaters and the industry in a "fair" way. "With the industry able to keep the existing infrastructure, boaters will still be able to access fuel in convenient locations," he said.

The RYA and BMF also confirmed that boaters will have to self-declare whether they are running a commercial or recreational vessel, and how much of their fuel will be used for heating, which attracts a lower duty.

HMRC's Dave Fitzgerald told MBM that it would become a criminal offence to use red diesel for propulsion without proof that a boater paid the full rate of duty. The story noted that the details of how this declaration will be made by boaters is still subject to negotiation. But Fitzgerald said the overall duty structure has been settled.

"The policy is fixed," said Fitzgerald. "It won't be changed unless the law is amended during the Finance Bill process. It will be enacted in the summer and be implemented on 1 November."

(4 March 2008)