The European Commission yesterday (30 May 2013) formally requested 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" and has issued a reasoned opinion to the UK Government.  

"The UK Government and the European Commission have been in discussions over the continued availability of red diesel for use in private pleasure craft in the UK for several years and the European Commission indicated in July 2011 that it intended to commence infraction proceedings against the UK. Yesterday's announcement appears to be the next step in that process," comments Gus Lewis, RYA Head of Legal and Government Affairs.  

The Commission's announcement states that, under EU rules, 'fuel that can benefit from a reduced tax rate has to be marked by coloured dye. Fishing vessels for example are allowed to benefit from fuel subject to a lower tax rate but private boats must use fuel subject to a standard rate.'  

"Since November 2008, diesel purchased for propelling a private pleasure craft in the UK has been subject to the full rate of duty," continues Gus.  

"While the Commission is correct in that reduced-duty fuel must be dyed, however, the EU rules do not prohibit the use of dyed fuel on which the full rate of duty has been paid."  

"The RYA's position remains unchanged. We consider that the system adopted by the UK Government allowing recreational boaters to use duty-paid red diesel is consistent with the EU rules. We will be discussing with HM Revenue and Customs how the UK Government intends to respond to the Commission's request," concluded Gus.  

The Commission expects a response within two months. In the absence of a satisfactory response within that period, the Commission may refer the UK to the European Court of Justice.  

Read more here about Red diesel: EC infringement proceedings