Inland Revenue is watching us

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johndove

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Just heard of a Sealine that went from Eastbourne to the West Country on holiday and back and filled up a number of times over the August 3 week family holiday,

He paid the 60% rate for fuel as he thought was correct!

Had a letter this week from the Inland Revenue, asking him, to justify the 40% on domestic use!

He can’t and is a worried man and would like to know how they knew, where, when and how much he got each time!
 
johndove said:
Had a letter this week from the Inland Revenue, asking him, to justify the 40% on domestic use!
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Sounds like he needs to get in touch with the RYA and get some advice! If he's not already a member, it could be £43 well spent.

johndove said:
He can’t and is a worried man and would like to know how they knew, where, when and how much he got each time!
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Try a Freedom of Information Act request. Might be worth putting in a Data Protection Act request at the same time. That way, when one office claims that it's not an FOI matter because it relates to personal information, and another claims that it's not a DPA matter because it concerns official information, he can copy their replies back to each other.
 
Its justifiable inasmuch as the 60/40 split for usage is achieved over the average use of the boat for the whole year - not just a three week period in August when obviously more of the proportion is used for propulsion. However in the winter when cruising is less and sitting at the berth with the heaters on the proportion will be reversed. Are they then going to allow a declaration of split higher than 60/40 and not query that?

The 60/40 split was agreed with the RYA as a compromise figure, for the convenience of everyone including the HMRC, in order to avoid creating a massively unwieldy system where we have to declare the exact usage for propulsion/heating every time we fill up - massively increasing everyone's paperwork and inconvenience. Its crazy that they should now start to query their own agreed figure in this way.
 
that is where 'understandings' fail. Not everyone in the system is in on it. No legal precedence, no prior on how to handle the paperwork, and some lowly hard pressed person, who is probably a really lovely person in real life asks, 'how do I put this through my 3.4566683 Billion £ database/automatic invoice generating/I hate it cos it doesn't work ****, system. No one has told me how the 60/40 system works, so she asks her manager.

He's been on the job for 3 months. Hum, this sounds dodgy, I'd better ask someone. Grace period of another 3 month follows.
 
60/40 on what? I cant think they ve traced his fuel spend over three weeks- so I wonder what invoice they are querying, and how they got hold of it. That would be very interesting to know.
 
strakeryrius said:
The 60/40 split was agreed with the RYA as a compromise figure, for the convenience of everyone including the HMRC, in order to avoid creating a massively unwieldy system where we have to declare the exact usage for propulsion/heating every time we fill up - massively increasing everyone's paperwork and inconvenience. Its crazy that they should now start to query their own agreed figure in this way.
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But what was their interpretation of the agreed figure, we know what our interpretation of the RYA's interpretation is.

It's Inlands Revenue's that counts in the end.

Brian
 
Well first i'd make sure it's not a mate playing a practical joke, that's exactly the kind of thing my mates would try ..

Assuming it's not, then I seem to remember that HMRC previously stated that anyone claiming a 60/40 split didn't need to keep records to support it. So maybe a response stating that he can't justify it because he has not kept any records in line with HMRC's advice. They would be laughed out of court IMO if they tried to bring a case against someone when they'd issued advice themselves that you don't need to keep any records if you claim 60/40.

Actually, what i'd really do is phone jfm for advice, but for those that don't have a flashing red phone in their drawing room, i'd wait and hope he responds to this post :-)
 
Nick_H said:
Well first i'd make sure it's not a mate playing a practical joke, that's exactly the kind of thing my mates would try ...
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Mine too, and if it wasn't the ones with access to it, it would be easy enough to create a bit of headed paper with a colour printer!

Maybe one of the marina's has screwed up; here on the Thames (where the split is probably a bit harsh as we can only do about fifty miles a week and spend half our time sitting waiting for locks and having picnics) I was told that if I changed the split they would notify the IR

R
 
From the HMRC website:

4.3 How do I work out the proportion of fuel used for propulsion?

We recognise that the declaration made by you will be an estimate but you must make every effort to ensure it is as accurate a reflection of your usage as possible.

Analysis by both the industry and HMRC suggests that a split of 60% for propulsion and 40% for other use probably reflects most people’s fuel use and it is therefore likely that many users will declare such an apportionment. This will make it easier for suppliers (RDCOs) to work out the additional duty and VAT. However, where you know that your propulsion use may be more or less than the above apportionment split or a craft clearly has no non-propulsion fuel use, then you must declare your actual intended usage.

The method of apportionment introduced under this scheme may only be applied to supplies of red diesel, not to supplies of other fuels, such as white diesel or petrol.
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That does seem to suggest you are supposed to declare how much you will be using for propulsion and how much for heating. So in the winter if you aren´t going anywhere you can claim 100%, but in the Summer they may well question your 60/40 claim.

http://customs.hmrc.gov.uk/channels...E_PROD1_029598&propertyType=document#P50_4542
 
4.3 How do I work out the proportion of fuel used for propulsion?

We recognise that the declaration made by you will be an estimate but you must make every effort to ensure it is as accurate a reflection of your usage as possible.

That surely is the point, you must be able to show it's a true reflection of your usage.

Having once gone through a tax audit, I do not trust a word that IR say, or that they will follow any statement, or guidlines they make or issue. They were trianed by retired ex German SS officers, they only see data in a way that suit them.

It is easy for them to do a check on high value boat owners, check boat to taxable income and there tax records, pick out likley cases, follow the boat during summer, can you please justify your tax claim on your fuel, that's looks wrong for your use, we would like to check the rest of your income tax claim to see if that is wrong as well.

Depends on how you veiw IR and customs.

Brian
 
All this may soon cease to be an issue, as last week I was told that from 2011 red diesel would no longer be available to boat owners, due to Green issues [usual excuse for extra taxes] a new fuel, with maybe blue dye added would become the only legal option, and guess what, it would be priced at todays prices £1.08 per litre.
This info was from a fuel supplier.
 
capsco said:
All this may soon cease to be an issue, as last week I was told that from 2011 red diesel would no longer be available to boat owners, due to Green issues [usual excuse for extra taxes] a new fuel, with maybe blue dye added would become the only legal option, and guess what, it would be priced at todays prices £1.08 per litre.
This info was from a fuel supplier.
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I can't see that happening either, the infrastructure is in place for all waterborne vessels, I could see how they could make it work, but I don't want to explain here in case they're looking for ideas how to do it,:D

but IMHO it would turn into a environmental nightmare, smallish diesel powered cruisers owners, like myself, won't like paying something like 10p a litre premium over supermarket prices to have their boats filled, it's a bit different when talking about cars,a large car might have an eighty litre tank, but even small boats like mine hold six hundred litres, and that £60 per tankfull I'd rather go to tescos with 25 litre drums and fill by hand just to spite the system, than let them take my money.

The day everyone grows a pair, and joins together and says NO, will be the day this country might start looking to be going in the right direction again.

rant on hold, not over!
 
epervier said:
The day everyone grows a pair, and joins together and says NO, will be the day this country might start looking to be going in the right direction again.
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That is not going to happen as blockading ports and burning sheep is not our way and silent disobedience is hardly going to bother any government official.

As long as we quietly mutter our annoyances and sign the Number 10 petitions, the government is happy as we are not rioting in the streets.
 
johndove said:
Just heard of a Sealine that went from Eastbourne to the West Country on holiday and back and filled up a number of times over the August 3 week family holiday,

He paid the 60% rate for fuel as he thought was correct!

Had a letter this week from the Inland Revenue, asking him, to justify the 40% on domestic use!

He can’t and is a worried man and would like to know how they knew, where, when and how much he got each time!
Click to expand...

I smell the same rat as Nick H. Is this urban myth or do you have it first hand, ie a friend of yours has got the letter? If it's some kind of very secondhand info then it obviously could be very inaccurate. But if it's true it's quite an interesting development!

I'd like to see the actual letter. If it says no more than you describe I'd reply briefly along the lines of

"Thank you for your letter of [date]. My boat uses fuel for both propulsion and non propulsions. The non propulsion part includes heating and running a generator. My boat is quite typical and so I estimate 60% of the fuel is used in propulsion and 40% for non propulsion, which conforms to analysis carried out by both HMRC and the boating industry, as described in paragraph 4.3 of HMRC Notice 554. My estimate is therefore in line with what HMRC has accepted is typical, and with the estimates used by virtually all other boat owners. I trust therefore that you can accept it but please let me know if you need anything else."

I absolutely would not get into detialed points like whether the estimate is meant to be for that particular fill up or all fuel use over the season, or anything like that. My guess would be (assuming this isn't a hoax) that the local tax office is new to this or is making a few random enquiries in the hope of catching boats using 60/40 when they have no genset or Eberspacher. There are also lots of points to make about fairness (why is this guy being picked on when thousands of others aren't? HMRC aren't allowed to be capricious, etc) but none of those points belongs in this first round

Do you know this person? Will you be able to tell us what happens next?
 
Hi all

I am new owner and thought i would ask ....what is this 60% rate business?

I thought if i bought fuel, i paid the price at the pump and that was it?

is there something i need to know as a new owener that would make my cruising less expensive?

can i claim back 40% of the cost of fuel i buy?

anybody that would take the time to explian this to me would greatly appreciated!

regards

John
 
johndove said:
Just heard of a Sealine that went from Eastbourne to the West Country on holiday and back and filled up a number of times over the August 3 week family holiday,

He paid the 60% rate for fuel as he thought was correct!

Had a letter this week from the Inland Revenue, asking him, to justify the 40% on domestic use!

He can’t and is a worried man and would like to know how they knew, where, when and how much he got each time!
Click to expand...

Some b***ard has squealed on you. Probably a jealous one at that. Put the letters in the bin let them try an prove all that in court.
 
Fuel prices and split Cowes 7-12-09

I topped up with half a tank at the 100% domestic rate on Saturday, but that was to replace fuel used by my Webasto for heating so far this winter. I last filled up in September and I've hardly motored anywhere since.
Don't know how I could prove it though if they come after me.
 
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