Inland Revenue is watching us

[CX54WEK]

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?

Surely running the alternator from the engine is charging your domestic batteries thus classed as domestic use. I dont believe you need diesel heating to claim the 60/40 split.

 

[fireball]

Running the main engines probably also heats water for showers - which you'll need plenty of if taking a dip in the sea during the summer months. But JFM's initial response looks good and will probably stop the jobsworth in their tracks. What they go for is easy pickings

 

[Andrew_Fanner]

A long time ago in a Galaxy far far away I did work for HMRC, when it was just Inland Revenue, working invstigating activities in the grey and black economy. One of the tricks of the trade was looking at holiday expenditure and comparing that with an estimate of disposable income based on declared income and any asset disposals. Bear in mind that falsim in uno, falsum in omnes is the sort of thing written over the door of compliance investigations.

But, and this is a big but, chasing things that have previously been defined as OK by such as the Notice referred to was, and I hope is, regarded as a fast way of making a tit of yourself in front of the Commissioners who, also being taxpayers, have no especial favour for the Revenue.

Its also possible that HMRC are checking that the fuel berths used have actually dispensed that fuel and retained the correct amount of tax rather than chasing a particualr individual, but there again, nobody else has raised the issue.

 

[gjgm]

Surely running the alternator from the engine is charging your domestic batteries thus classed as domestic use. I dont believe you need diesel heating to claim the 60/40 split.
*
My understanding is that you can have/have not anything you like. However, your declaration is that you believe the split to be fair, to the best of you abilities. You can claim 80/20 if you think that is more likely.
So, if you have a smaller diesel rib with no heating and no cooking and no generator, I guess you ll need some pretty poor condition batteries What we dont know is if anyone has any interest in investigating. Its an odd letter, if genuine.

 

[PCUK]

Going back to the blue diesel mentioned earlier. Does that mean that commercial vessels would no longer be able to use red diesel?

 

[sailorman]

Surely running the alternator from the engine is charging your domestic batteries thus classed as domestic use. I dont believe you need diesel heating to claim the 60/40 split.
*
My understanding is that you can have/have not anything you like. However, your declaration is that you believe the split to be fair, to the best of you abilities. You can claim 80/20 if you think that is more likely.
So, if you have a smaller diesel rib with no heating and no cooking and no generator, I guess you ll need some pretty poor condition batteries What we dont know is if anyone has any interest in investigating. Its an odd letter, if genuine.

the agreed split is 60/40 QED

 

[gjgm]

the agreed split is 60/40 QED
*****

I dont think you are right. You can claim any split you like. You just have to be able to back it up if asked.
How QED ?

 

[steve6367]

You can claim what you like - having a sailing boat with a 20HP engine + heating / hot water I claim 40/60 and I can justify that using hours run for heating and engine.

The 60/40 is only a guideline - you still need to be able to justify it if challenged.

As to how they know, every time I fill up I have to give my address etc - I assume this is available to HMRC if they wish.

 

[Nick_H]

I thought the relevance of the 60/40 split was that HMRC/RYA/BMF had reached a concencus that a majority of boat owners would reasonably use this split, and as a result it would not be necessary for boat owners declaring 60/40 to keep records to prove it. If i'm right, then doesn't this transfer the burden of proof from the boat owner to HMRC? In other words, if you claim less tax to pay than 60/40 you have to be able to prove you use that amount for non propulsion, but if you claim 60/40 or higher, then HMRC have to prove that you don't?

I certainly took that as meaning that anyone can claim 60/40 and not have to worry about an investigation, regardless of what boat and ancilliaries they have, but if the OP's letter is genuine then it seems that may not be the case, and HMRC may target some owners where they feel they couldn't possibly use 40% of all fuel for non propulsion, for instance if they don't have heating or generator installed.

I'm still thinking the letter is suspect though, or we'd probably have heard of more cases by now, although anyone who's dealing with HMRC at the moment will have noticed they are becoming more aggressive, almost certainly under orders from cyclops.

 

[jfm]

I thought the relevance of the 60/40 split was that HMRC/RYA/BMF had reached a concencus that a majority of boat owners would reasonably use this split, and as a result it would not be necessary for boat owners declaring 60/40 to keep records to prove it. If i'm right, then doesn't this transfer the burden of proof from the boat owner to HMRC? In other words, if you claim less tax to pay than 60/40 you have to be able to prove you use that amount for non propulsion, but if you claim 60/40 or higher, then HMRC have to prove that you don't?

I certainly took that as meaning that anyone can claim 60/40 and not have to worry about an investigation, regardless of what boat and ancilliaries they have, but if the OP's letter is genuine then it seems that may not be the case, and HMRC may target some owners where they feel they couldn't possibly use 40% of all fuel for non propulsion, for instance if they don't have heating or generator installed.

I'm still thinking the letter is suspect though, or we'd probably have heard of more cases by now, although anyone who's dealing with HMRC at the moment will have noticed they are becoming more aggressive, almost certainly under orders from cyclops.

Hmmm. The onus of proof doesn't quite work like that. Forgive the geekiness (and skip this para if you prefer!) but a tax inspector can (in law) raise an assessment if he has reasonable grounds to believe his assessment is right or a good estimate. Once the assessment is issued, taxpayer can appeal and burden of proof is with taxpayer.

Now in this case, if you got an assessment (which I doubt would happen if you were 60/40), you could

(i) appeal the assessemnt (in which case you have burden of proof) OR
(ii) you could dispute the validity of the assessment on the grounds that the inspector was wrong in thinking it was reasonable, bearing in mind HMRC's own research shows 60/40 is "typical" and the boat in question (a sealine whatever) is the epitomy of "typical". Here again the burden of proof is on taxpayer.

I would be amazed if HMRC pursued 60/40 people and I'd still recommend a short reply as above. Incidentally, my suggested letter is intended to work even if you don't have a generator with a separate engine. I'd send the same letter if the only electricity generation on the boat is alternators charging the batteries. Obviously delete the reference to heating if you have no heating, but leave it in if there is any water or space heating

I think this letter, if real, is the product of a tax office who aren't familiar with all the background to the 60/40. And yes the cyclops has told them to collect tax, though not today becuase today he is busy trying to define "investent banker" and "bonus" so that he can pass a law that will be as hard to draft as a law saying you pay extra tax if you're an electrician but not if you're a plumber.

 

[John100156]

Simple: Just tell them you have taken the readings from a fuel meter installed in your fuel line that measured the fuel used to your heating system, you deducted this amount from the total fuel used.

Then fit a joint piece into your heater fuel line, should they ever come to inspect the boat you would have to declare to them the meter was faulty so you removed it, and may or may not replace it at a later date (should this be true of course) - serves them right for adopting such stupid regulations!

If they disgree, no worries, I believe they have WiFi in Dartmoor......

 

[oldgit]

Just heard of a Sealine.

Believe half of what you see and nothing of what you hear. ?

 

[John100156]

So Oldgit, if what you see is what you get, and you only believe half what you see, you also believe in only half what you get! Perhaps this is the methodology applied by HMRC!

What with Deleted User having to move from Spain to Sardinia to avoid Met Tax fines, have all tax laws gone bad? Does EU stand for Entirely Useless? Whatever next? Tax on barnacle growth......?

 

[jfm]

Simple: Just tell them you have taken the readings from a fuel meter installed in your fuel line that measured the fuel used to your heating system, you deducted this amount from the total fuel used.

I know your post is tongue in cheek John but it's perhaps worth making the pont that the %/% declaration when you buy fuel is a PREDICTIVE estimate. It is what you estimate will happen IN THE FUTURE. And added to this, there's a syntax issue in the form or declaration that HMRC published for fuel buyers to sign, which iirc (and I forget the detial but I made a post about it a year ago) gives you an additional get out on this prediction thing, if HMRC ever pursue you

 

[TrueBlue]

As to how they know, every time I fill up I have to give my address etc - I assume this is available to HMRC if they wish.

You don't have to give your address, all HMRC require is that the owner can reasonably be identified - that could be done by vessel name, SSR, whatever.
However, RDCOs, fearful of a local HMRC officer causing them grief with possible loss of license insist on an address, but as they know that they are not liable for the accuracy of details, they don't as for proof.
I, for one am not happy with having my home address open to view from following customers. So I don't use that.

Other details of the process are not well known by local officers, despite having had "training" so tend to say something else when questioned.

In any event HMRC have put us on notice that the will make enquiries from time to time, just to show that they are doing some form of monitoring. So don't get stroppy, just state your reasonable case.

 

[volvopaul]

When I read all this it just makes me wonder what the goverment will do next to raise taxes in this country as we are in such a mess due to there own faults, i sit here watching the news of soldiers lost in a war thats not really anything to do with us, what a great loss to this country.

Joining the EU in my opinion was a big mistake there is no wonder Ireland has wanted to be separate for years, i can see Scotland getting there one day not too far away.

Surely the HM revenue must have stated the full reason for the enquiry, I too have
recieved email from the HM on other tax issues, they were so clever demanding payment from me that the tax reference code wasnt even mine!

If it carries on like this for boaters in the UK im looking at moving, or going back to my other pastime of years gone by, Rallying! at least there is no 60/40 mixup something or other when you visit the pumps.

 

[oldgit]

One post with a secondhand bit of info, not a sniff of further detail,the original poster appears to have vanished when a quick phone call to his mate and a further
post would have provided the unvarnished facts and .............Sigh

 

[longjohnsilver]

Surely the HM revenue must have stated the full reason for the enquiry, I too have
recieved email from the HM on other tax issues, they were so clever demanding payment from me that the tax reference code wasnt even mine!

Paul, I think you'll find any email of that nature is spam. I spoke to HMRC only a week or so ago asking them to email me, inspector said that they do not correspond by email.

 

[Major Catastrophe]

Surely the HM revenue must have stated the full reason for the enquiry, I too have
recieved email from the HM on other tax issues, they were so clever demanding payment from me that the tax reference code wasnt even mine!

Paul, I think you'll find any email of that nature is spam. I spoke to HMRC only a week or so ago asking them to email me, inspector said that they do not correspond by email.

I wouldn't waste time on this. The OP repeated hearsay and hasn't bothered to come back with more concrete evidence, or answer a single question put to him. It's a 'vapourthread'

 

[johndove]

Sorry am here, just been away for 3 days!

Called the guy with the Sealine and original problem.

He has placed it in his accountants hands and waiting for a reply.

Also he will hopefully send a copy of the letter to me, when it arrives I will if possible post it.

He also been reading all of the above and thanks all for your comments, but even though he is on here in his own name would rather stay anonymous until he knows how things stand.