Red Diesel Calculation

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How is the price structure 60/40 calculated.

I have been routed to various sites that give examples, but I don't understand them.

For instance the quote say 60 litres @ (e.g.) 70p per litre.

Then 60 X xx p per litre ADDITIONAL DUTY - what is this additional duty, how is this calculated, where does it come from.

If you can understand my question - but the ignorant rarely ask the correct question - :ambivalence:your patience and help please.
 
From HMRC website

Propulsion calculation (that is, 60%)

60 litres @ 0.70ppl = £42
60 litres @ 46.81ppl = £28.08 (additional duty payable to HMRC)
VAT @ 5% = £3.50
Propulsion Total = £73.58
Non propulsion calculation (that is, 40%)
40 litres @ 0.70ppl = £28
VAT @ 5% = £1.40
Non propulsion Total = £29.40
Transaction Total = £102.98

From https://www.gov.uk/government/publi...leasure-craft-and-for-private-pleasure-flying
 
You can, of course, choose your own ratio of propulsion to non-propulsion. The seller may try and persuade you it is 100%, 60/40% or 0% but it is up to you to choose any ratio you want. Just be prepared to justify it to the Revenue and be aware of the penalties if they don't share your view.
 
The "additional duty" is the difference between the rebated rate of duty for red diesel and the full rate of duty for road diesel. Since 2011 these rates have been 11.14 p/l and 57.95 p/l respectively - hence the 46.81 p/l of additional duty in the calculation given by Trevorr.

See https://www.gov.uk/government/publications/rates-and-allowances-excise-duty-hydrocarbon-oils/excise-duty-hydrocarbon-oils-rates

The point here is that the duty on red diesel isn't zero, it is just much lower than road diesel. So, on the proportion of diesel used for propulsion, private pleasure vessels have to pay the difference between the two rates in addition to the price of red diesel for "domestic" use (because the lower rate of duty is already included in the headline price of red diesel).
 
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So how many people use the default ratio regardless of the actual usage?

I'll bet most people claim the 60/40 even though the only use of diesel on board is propulsion.
 
jokerboat said:
So how many people use the default ratio regardless of the actual usage?

I'll bet most people claim the 60/40 even though the only use of diesel on board is propulsion.
Click to expand...

I claim 60/40.

I have a 40HP engine and a Webasto hot air blower with 4 cabin outlets. I have no accurate information as to the amount of fuel each of them consumes and I don't measure the time each is in use to be able to do any detailed calculation (and I have that common issue for many Volvo control panels whereby the engine hours meter went on the blink some years ago). Above all, the relative use of engine versus heating is very variable according to ambient temperature (esp at night) and how windy it is when I'm doing long passages.

At a guess, 60/40 probably isn't far out from reality if averaged over a reasonably long period of time. I use less than 200 litre of diesel a year, so I'm not going to get too worked up about it and nor, I suspect, is HMRC.
 
jokerboat said:
So how many people use the default ratio regardless of the actual usage?

I'll bet most people claim the 60/40 even though the only use of diesel on board is propulsion.
Click to expand...

Not entirely true if you charge your batteries from the engine & one only has to demonstrate that one needs 40% for that.
A few calculations on current consumption the charging rates would then give a fairly inaccurate answer that you could use for revenue purposes
 
Angele, thanks you got it in one!

That was the point I was trying to put into perspective and your excellent explanation did it.

Thanks.


Angele said:
The "additional duty" is the difference between the rebated rate of duty for red diesel and the full rate of duty for road diesel. Since 2011 these rates have been 11.14 p/l and 57.95 p/l respectively - hence the 46.81 p/l of additional duty in the calculation given by Trevorr.

See https://www.gov.uk/government/publications/rates-and-allowances-excise-duty-hydrocarbon-oils/excise-duty-hydrocarbon-oils-rates

The point here is that the duty on red diesel isn't zero, it is just much lower than road diesel. So, on the proportion of diesel used for propulsion, private pleasure vessels have to pay the difference between the two rates in addition to the price of red diesel for "domestic" use (because the lower rate of duty is already included in the headline price of red diesel).
Click to expand...
 
Thanks

Thank you everyone - I wanted this bottomed out as I have a new fuel tank and will be carrying out the biggest single fill I have ever done - alright only 100 L but still my biggest fuel buy.

Thanks to you all.
 
trevorr said:
From HMRC website

Propulsion calculation (that is, 60%)

60 litres @ 0.70ppl = £42
60 litres @ 46.81ppl = £28.08 (additional duty payable to HMRC)
VAT @ 5% = £3.50
Propulsion Total = £73.58
Non propulsion calculation (that is, 40%)
40 litres @ 0.70ppl = £28
VAT @ 5% = £1.40
Non propulsion Total = £29.40
Transaction Total = £102.98

From https://www.gov.uk/government/publi...leasure-craft-and-for-private-pleasure-flying
Click to expand...

So, that comes down to 102p per liter.
Yet at every marina in our neighbourhood, 60/40 taxed red diesel costs more than 100% taxed white at the petrol station.
Rip-off Britain is alive and kicking :mad::mad:
 
awol said:
Then adjust your usage ratio to achieve the price you feel is fair.
Click to expand...

Not every marina offers you the option to adjust the ratio.
At my marina, there are three options:
- 100% taxed (at a price to make eyes and wallet bleed).
- 60/40 (about 10% more expensive than 100% taxed white at the pump)
- 100 heating (about the 60/40 price on the HMRC website)

Does this not reek of profiteering to you?
 
Excise Notice 554: fuel used in private pleasure craft and for private pleasure-flying gives information and guidance to fuel suppliers.
3.7 How do I know how much fuel is being used for propulsion as opposed to non propulsion use?

It is the purchaser’s, not the supplier’s, responsibility to declare the proportion of fuel used for propelling the craft. It is your responsibility to charge the correct amount of duty and VAT on the supply, see section 6 below.

The method of apportionment introduced under this scheme may only be applied to supplies of marked gas oil, not to supplies of other fuels, such as white diesel or petrol.
3.8 What if a private user claims 100% is used for non propulsion purposes?

In recognition of their status, residential boat owners, whose primary, or often their only, place of residence is their boat, are allowed to purchase all of their fuel at the rebated rate. If a private user claims such status and claims that 100% of their fuel is for purposes other than propulsion, then you may supply the fuel without charging any additional duty and without a declaration, but you should note your records accordingly. See paragraph 4.7 for more information.
Click to expand...

So go argue with your marina ..... or STFU
 
OR4751 said:
Not every marina offers you the option to adjust the ratio.
At my marina, there are three options:
- 100% taxed (at a price to make eyes and wallet bleed).
- 60/40 (about 10% more expensive than 100% taxed white at the pump)
- 100 heating (about the 60/40 price on the HMRC website)

Does this not reek of profiteering to you?
Click to expand...

Absolutely not true. agreed, they are the advertised rates as you'll no doubt find in any marina (I hazard to say bar none) however if you ask, it will take abit of time to work out, but trust me , it will/can be done ;)
 
Time this farce was done away with. Unless living aboard I would have thought all diesel is for leisure use and I fully understand the Belgians and Dutch having become incensed. The issue of needing a supply of white and red diesel being available at ports and marinas is a distraction that commercial organisations could overcome with a small investment.
 
johnphilip said:
Time this farce was done away with. Unless living aboard I would have thought all diesel is for leisure use and I fully understand the Belgians and Dutch having become incensed. The issue of needing a supply of white and red diesel being available at ports and marinas is a distraction that commercial organisations could overcome with a small investment.
Click to expand...
So commercial fishermen are only doing it for fun
(Actually that is probably right these days)
 
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