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Red diesel

In October 2018 the Court of Justice of the European Union ruled that the United Kingdom of Great Britain and Northern Ireland had failed to fulfil its obligations under Council Directive 95/60/EC on fiscal marking of gas oils.

In effect, following the Court’s ruling, the expectation of the European Commission is that the UK must stop allowing the use of red diesel for the purposes of propulsion of a private pleasure craft and must therefore switch to white diesel.

Consultation on the use of diesel by private pleasure craft

HM Revenue and Customs (HMRC) launched a consultation (see latest updates) which outlines how the government intends to implement the judgment by requiring private pleasure craft to use white diesel for propulsion, and seeks evidence regarding the impact this will have on users of diesel propelled craft.

The government intends to abolish the scheme introduced in 2008 that allows users of diesel powered private pleasure craft (e.g. yachts, canal boats and motorboats) to purchase red diesel and pay the duty differential between red and white diesel on the fuel used for propulsion.

The RYA will respond to the consultation in line with the policy on this issue agreed by its Cruising and Government Affairs Committee, setting out the many practical issues that implementation will bring and seeking a long transition period if the UK remains compelled to implement the judgement. This policy also urges Government not to implement the CJEU judgement in the event of a no deal Brexit. The RYA has been part of a group of key stakeholders that HMRC has engaged with pre-consultation and will continue to represent the interests of our members and the wider boating community in further discussions.

Boaters should experience no change in respect of their use of red diesel both in the UK and overseas until the UK Government makes changes to existing legislation. The RYA will be lobbying for any new legislation to include a transition period of sufficient length to recognise that changes will need to be made to the supply system and that the marker dye in red diesel will be detectable in boat fuel systems for a considerable period of time after the commencement date of any change to the use of white diesel.

The response from RYA Scotland to the HMRC consultation is attached and may provide a clearer idea of the potential impact of the ruling in Scotland. With our colleagues across the RYA, British Marine and British Marine Scotland, RYA Scotland is clear that this implementation has significant negative implications for recreational boating and its associated industries, not least of which is the growing area of marine tourism.  

We would urge you to make your own position known to HMRC by responding to the consultation and encouraging your networks to do the same and would be happy for the attached document to be used in any way to support this process. 

The consultation will close on Monday 9 September and is available here.

Should you have any difficulties with red diesel abroad, please contact the RYA’s Cruising, Legal and Government Affairs team via boating.abroad@rya.org.uk or 023 8060 4232.

 

 

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