Confirmation all fuel from 1 November will at 5% VAT not 17.5%

stefan_r

stefan_r

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http://www.ybw.com/auto/newsdesk/20080909145755mbmnews.html

Red diesel VAT twist confirmed by HMRC
The tale of red diesel has taken another dramatic twist with confirmation that all the fuel you take on from 1 November will be hit with a VAT rate of just 5%.

This is an abrupt shift in position from HM Revenue & Customs after briefing previously that 60% of your fuel would attract full VAT of 17.5%.

The reason for the about face is not known at present, but it is good news for boaters, and should mean prices stay below £1 a litre based on a current pump price of 70ppl.

MBM is now seeking an explanation from HMRC, which has spent the last six months telling journalists and the boating industry to expect a full rate of VAT on a big slice of leisure boat fuel.

A HMRC insider said there had been "some confusion" with different versions of the brief, the correct version of which can now be seen on HMRC's website.

The timing of this news certainly couldn't be more awkward for MBM, coming as it does just days after the November issue went to the printers containing HMRC's previous position.

But while the VAT information in the issue may now be inaccurate, the rest of the information remains correct.


Motor Boats Monthly, 9 October 2008
 
I dont think MBM need worry. I think readers will just put it down to the normal absence of proof reading /forums/images/graemlins/tongue.gif
 
Excellent news.

I feel sorry for those who decided to quit because of the uncertainty & happy for those selling at pressent.

Buyers on the other hand might find bargains a little harder to negotiate, so good & bad news depending your possition in the market.

Has to be good for the majority though. /forums/images/graemlins/grin.gif /forums/images/graemlins/grin.gif /forums/images/graemlins/grin.gif
 
Truly, Gordy is a snake-oil sales operative par excellence!

Every budget he did the same thing:

Year 1: Widget tax to be increased by 100% in twelve months' time

Year 2: After review the Widget Tax will only be increased by 50%

Result: Mass rejoicing. "Thank Gord we only have to pay an extra 50% on our widgets."

Never, "We're still paying a lot more than 12 months ago."

Still, as the potato vendor said, on finding out he was to be paid by the unit, not by the weight, thank heavens for small murphies.
 
Sorry, should just add that the VAT does not affect the duty. 60% of your fuel will still be hit with 50.35ppl duty. It's just the VAT has come down on that proportion. I know you are all probably aware of this, but I had an email from a reader this morning asking me to clear it up.
 
Sounds a bit sarcastic, but wasn't meant to be!
All very clear and understood thanx /forums/images/graemlins/smile.gif
 
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and the petrol for my Volvo 431 will come down too ? /forums/images/graemlins/tongue.gif

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5p a liter duty on waterside petrol, now that would be nice!

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Agreed!!
 
Yes just paid 86ppl here on the river, so although this is all good news I don't think there will be much difference to a garage forecourt price. Given that its a 3hour round trip to my nearest fuel pontoon, I may well be using jerry cans for quick topups.
 
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Sorry, should just add that the VAT does not affect the duty. 60% of your fuel will still be hit with 50.35ppl duty. It's just the VAT has come down on that proportion. I know you are all probably aware of this, but I had an email from a reader this morning asking me to clear it up.

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JUST A NOTE YOU CAN DECLARE ANY AMOUNT YOU WANT I IS NOT FIXED AT 6O%.
 
My understanding is that 60/40 is deemed to be representative of most users. If you declare this, you don't need to keep records to justify it. You can declare any percentage you like, but if more than 40% is for domestic, It would be a very good idea to keep accurate records in case you ever have to prove it.

If you want to declare less than 40% for domestic, you will also be able to do that.
 
Sorry if this has been covered and it doesn't affect me as I use petrol but is it risky to default to the 60/40 declaration where a boat has no possible domestic use - ie where no heating is fitted??? Is there not a risk that a cursory inspection would show the declaration to be false and open the user to pay the unpaid duty???

ie where you have no domestic equipment fitted that uses diesel should you in fact declare 100% propulsion to be within the law??
 
Technically speaking, you are correct.
Having even a small heater fitted is a good idea.

Claiming 60/40 on an open RIB with a diesel outdrive and no accomodation could attract the wrong sort of attention.

dv.
 
you have to declare what you believe to be your use, with a nod from customs that over the broad spectrum of boats, 60/40 would be an average. Quite clearly, if you declare 60/40 knowing it to be wholly false, then you risk problems. I think there would be some defence of a 60/40 claim if by having heating and cooking faciilties you could at least indicate that the boat wasnt only used under propulsion.
 
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