Yesterday (24 July) Her Majesty’s Revenue and Customs (HMRC) indicated that the UK Government intends to challenge the Reasoned Opinion issued by the European Commission in May.
The Reasoned Opinion was issued by the Commission in support of its formal request that the United Kingdom amend its legislation 'to ensure that private pleasure boats such as luxury yachts can no longer buy lower taxed fuel intended for fishing boats', although since November 2008 diesel purchased for propelling a private pleasure craft in the UK has been subject to the full rate of duty.
Government support for recreational boating
“The UK Government has for several years supported recreational boating and the industry that serves it over the continued availability of red diesel for use in private pleasure craft in the UK and we are pleased that the Government has decided that it should challenge the Commission’s Reasoned Opinion,” comments Gus Lewis, RYA Head of Legal and Government Affairs.
“The British Marine Federation and the Royal Yachting Association have been working closely with HM Revenue and Customs to support the UK Government in its response to the European Commission and we will continue to do so,” adds Brian Clark, BMF Head of External Relations.
Securing availability of diesel fuel
The principal reason why the BMF and the RYA consider that private pleasure craft should be able to continue to use red diesel is to secure the continued availability of diesel fuel for recreational boaters.
If suppliers were obliged to supply only white diesel to private pleasure craft, this would result in many fuel suppliers having to incur significant costs in converting their equipment and it would have a significant impact on the availability of diesel for leisure boaters along the coast in more remote parts of the country, especially where harbours cater mainly for commercial (e.g. fishing) vessels.
The converse is the case for the inland waterways, where this would reduce significantly the availability of diesel at the rebated rate of duty for those narrowboats and barges (many of which are people’s homes) that are entitled to use it for providing heating and electricity.
Read more about red diesel.