Red Diesel - HMRC defence in EU

[MapisM]

Are those our home made historic "British" Northern lights or the foreign EEA Northern lights..think 50% of the population need to know

LOL, that's a very good question indeed. One which, obviously, I can't answer.
Otoh, short of being an astronaut, NL are by far the best natural landscape that this planet can offer, imho.
I'd rather enjoy them regardless of any "made in..." labels!
But that's me, of course!

 

[benjenbav]

Well, on the positive side, that can be a very nice route indeed.
If you're flying during the night, on a port side window seat, and the sun plays balls (that's a lot of IFs, I know...), the northern lights view can be breathtaking!

Nice route: check**

Night flight: check

Port side, window seat: check

Eyes shut from 1 hour out of YVR to 1 hour before LHR: check


** On Sunday/Monday I was onboard a 747-400. An old bus, but they still fly beautifully. I've flown the same route many times on various types: 777/787/747 and A380. The last mentioned is not my favourite: the pilots always seem to have to put them down on the tarmac like they really mean it.

 

[rafiki_]

However the basis of the EU's complaint is that by making lower duty red diesel available to UK boaters, the UK govt is effectively subsidising the UK marine industry which is against EU competition rules.

I'm not sure this is entirely right Mike. There are many examples of different tax rates being applied to a range of goods and services. Within the Eu, National States apply their own tax rates, fuel being 1 example. The UK applies a different road fuel duty to other states. Does this mean that others who apply a lower rate are subsidizing? Or does it mean that the State applies a range of taxes and duties as it sees fit, in order to balance its Exchequer? And which bit of the UK Marine Industry is being subsidized? You could possible say that boat retailers and brokers are being subsidized as more people will buy boats if they are cheaper to run? I guess that more imported boats are sold in the UK than UK built? (Don't know this but looking at the Hamble there are more Beneteaus, Jennaus, Bavarias than anything else). So the UK is subsidizing the French, German and other Eu manufacturers at least as much as UK manufacturers, so how is this a competitive issue? As far as I'm aware, boats visiting from the Eu pay the same for fuel as us locals, again no competition issues. Therefore the Eu Commission issue is about principles, one should not use commercial fuel in a leisure boat for propulsion, it is nothing to do with the duty rate. or have I completely misunderstood this?

 

[Deleted User YDKXO]

I'm not sure this is entirely right Mike. There are many examples of different tax rates being applied to a range of goods and services. Within the Eu, National States apply their own tax rates, fuel being 1 example. The UK applies a different road fuel duty to other states. Does this mean that others who apply a lower rate are subsidizing? Or does it mean that the State applies a range of taxes and duties as it sees fit, in order to balance its Exchequer? And which bit of the UK Marine Industry is being subsidized? You could possible say that boat retailers and brokers are being subsidized as more people will buy boats if they are cheaper to run? I guess that more imported boats are sold in the UK than UK built? (Don't know this but looking at the Hamble there are more Beneteaus, Jennaus, Bavarias than anything else). So the UK is subsidizing the French, German and other Eu manufacturers at least as much as UK manufacturers, so how is this a competitive issue? As far as I'm aware, boats visiting from the Eu pay the same for fuel as us locals, again no competition issues. Therefore the Eu Commission issue is about principles, one should not use commercial fuel in a leisure boat for propulsion, it is nothing to do with the duty rate. or have I completely misunderstood this?

I'm only stating what I understand the situation to be and of course I may be wrong. The point is not that the UK applies a different rate of duty on any kind of fuel to other EU countries. It is perfectly entitled to do that under existing EU rules. The point is that the EU Energy Directive requires private pleasure craft users to pay the highest rate of duty on fuel used for propulsion, whatever that duty is, and by allowing UK pleasure craft users to use lower duty red diesel, it is effectively subsidising UK pleasure craft users and contravening that Directive. Whether if private pleasure craft users paid the highest rate of duty on their red diesel purchases that would continue to contravene the Directive I dont know but AFAIK it is the duty not the colour of the diesel which is the main issue. If thats not correct, happy to be flamed

 

[rafiki_]

I'm only stating what I understand the situation to be and of course I may be wrong. The point is not that the UK applies a different rate of duty on any kind of fuel to other EU countries. It is perfectly entitled to do that under existing EU rules. The point is that the EU Energy Directive requires private pleasure craft users to pay the highest rate of duty on fuel used for propulsion, whatever that duty is, and by allowing UK pleasure craft users to use lower duty red diesel, it is effectively subsidising UK pleasure craft users and contravening that Directive. Whether if private pleasure craft users paid the highest rate of duty on their red diesel purchases that would continue to contravene the Directive I dont know but AFAIK it is the duty not the colour of the diesel which is the main issue. If thats not correct, happy to be flamed

I think it is the use of what the Eu thinks is non-road fuel for leisure craft. In the Uk, clearly non-road fuel is dyed red. What do leisure aircraft use for fuel? Is it the same as commercial? If so, where is the logic?

 

[Deleted User YDKXO]

What do leisure aircraft use for fuel?

I doubt if its red diesel

 

[benjenbav]

And, in the red (diesel) corner: Cessna 172, diesel - a torquey little beast, I believe.

 

[oldgit]

Somebody more current than me will know, but seem to remember some sort of rebate wheeze on AVGAS if the flight was for training purposes ? and involved flying out of UK......?
Usually claimed when flying somewhere nice and warm for the weekend such as Le Touquet

 

[snowbird30ds]

Most light aircraft use avgas 100ll which is dyed blue and I believe has tax advantages attached although the base price is way higher than regular road fuel, there are diesels that can run on jet a1 which has even better tax advantages but they havn't taken over as much as some expected.
Most cessna 172's have a lycoming O-360's fitted running on avgas.

 

[Dick Atcherley]

Some aircraft run diesel engines (mostly theilert centurian motors, which are re-worked a-class merc 1.7 or 2.0 turbocharged units, running through a reduction gear). These run on Jet -a1 which, although different from diesel (more like kerosene), is good enough to run on. Jet A1 is sold tax free by international treaty, in order to create a level playing field. Leisure use in a GA aircraft is meant to attract tax. I don't know how many folk fess-up.

The rest of the GA fleet with lycomings and continental engines run on 100ll Avgas, which is dyed blue and is not unlike old 5 star petrol, and contains tetra-ethyl lead. This is necessary because most lycoming/continental motors run old fashioned magnetos, with fixed ignition timing, so need the lead to control detonation/pinking and to lubricate the valve seats. This technology is pickled in aspic technologically because of the rules governing the modification of aircraft running on CAA certificates of aviation. The typical cost of a litre of avagas £1.60 (although the channel islands are a lot less, around £1.05); if you fly out of the country with full tanks (and can prove this by way of receipts for the fuel) you can claim back the duty on the fuel at the rate of 37.7 pence per litre, regardless of how long the flight was so, if you lived on the south coast of england and flew to le touquet or cherbourg for lunch and had an aircraft with reasonably large tanks, you could turn a modest profit on the cost of the fuel used verses the fuel drawback.

In theory, if you had paid the duty of the diesel you bought in the first-place, you could do the same with a boat. The draw-back on diesel would be 57.95 pence per litre...

IMHO you'd have to have all of your paperwork in order to pull that off!

Drawback rates https://www.gov.uk/government/publi...arbon-oils/excise-duty-hydrocarbon-oils-rates

 

[maby]

...
Whether if private pleasure craft users paid the highest rate of duty on their red diesel purchases that would continue to contravene the Directive I dont know but AFAIK it is the duty not the colour of the diesel which is the main issue. If thats not correct, happy to be flamed

The focus of the EU action against us is the colour, but that is simply because it is the clearest cut contravention of the directives that we are committing. The directive simply says that all fuel supplied on a reduced tax regime must be marked red and specifies which classes of user are entitled to purchase marked fuel. It does not say anything about the levels of tax that shall be levied in each case. There may be other EU regulations that constrain tax levels, but those are not the focus of the current action.

 

[TallBuoy]

The supplier has no obligation other than to keep your record and your signed declaration. It is your obligation to buy fuel at the rates at which you intend to use it.
It isnt offered to you at 60.40...it is for sale at whatever rates you believe you will use the fuel. The responsibility is yours, not the supplier's.

Absolutely right. Anybody paying 60/40 when they use a few litres for domestic, and hundreds for propulsion should be declaring a higher ratio and paying duty accordingly. Diesel powered RIBs are an obvious case in point!

 

[Sneds]

Absolutely right. Anybody paying 60/40 when they use a few litres for domestic, and hundreds for propulsion should be declaring a higher ratio and paying duty accordingly. Diesel powered RIBs are an obvious case in point!

I'm sorry but that statement is 100% WRONG
60/40 is the accepted split. End off.
I don't t understand why so many people fail to grasp that.

No Eber? No difference
No calorifier? No difference
No batteries?

60/40 no questions

 

[MapisM]

60/40 no questions

If that's how it works (and I'm not saying it isn't - I'm taking your word for it), strikes me as one of the most self-contradicting rules ever written.
Calling it laughable is an understatement... :ambivalence:

 

[NormanS]

I'm sorry but that statement is 100% WRONG
60/40 is the accepted split. End off.
I don't t understand why so many people fail to grasp that.

No Eber? No difference
No calorifier? No difference
No batteries?

60/40 no questions

That is simply not true. You can make any declaration that you like, but if you claim more than 40% for non propulsion use, you may be asked to justify it.

 

[maby]

I'm sorry but that statement is 100% WRONG
60/40 is the accepted split. End off.
I don't t understand why so many people fail to grasp that.

No Eber? No difference
No calorifier? No difference
No batteries?

60/40 no questions

No, you are 100% wrong - and it is the fact that many think like you that has made it impossible to defend the rules to the EU and may, ultimately, make diesel effectively unobtainable to many leisure sailors outside the south coast. The EU directive says that we should not have any access to marked diesel for propulsion purposes. The UK HMRC has said that we can buy marked diesel provided we pay full duty on the fuel that we burn in the engine - this is in contravention of the EU directive. We are supposed to declare the fraction of the purchased fuel that we are going to burn in the engine - HMRC issued a guideline that they would not consider a ratio of 60/40 to be unreasonable and would not bother asking any questions if you declared at that level. BUT if you declare 60/40 on a boat that is not equipped with a separate diesel heater or separate diesel generator, you are committing tax evasion - ok, on a very small scale and nobody is going to bother investigating you, but the fact that many do it is just encouraging the commission to enforce the directive.

 

[petem]

https://www.gov.uk/government/publi...leasure-craft-and-for-private-pleasure-flying see section 4.3

 

[rafiki_]

BUT if you declare 60/40 on a boat that is not equipped with a separate diesel heater or separate diesel generator, you are committing tax evasion - ok,

Not really. my previous boat had no gennie, nor diesel heater. It had quite a lot of domestic battery capacity, and a hot water matrix piped to heat the saloon. We ran the port engine to charge the domestic batteries, and the starboard engine to heat the saloon. These both permissible as non-propulsion use. Life is not always as black and white as we might like to think.

 

[maby]

Not really. my pervious boat had no genie, nor diesel heater. It had quite a lot of domestic battery capacity, and a hot water matrix piped to heat the saloon. We ran the port engine to charge the domestic batteries, and the starboard engine to heat the saloon. These both permissible as non-propulsion use. Life is not always as black and white as we might like to think.

In this case, it's not so much a question of what we think as what the EU Commission thinks. Somewhere in the relevant directive, there are words to the effect that we (leisure sailors) cannot have marked fuel in a tank that can be directly connected to the engine that provides propulsion to the boat. There is no mention of whether or not the drive to the propellers is engaged. Section 4.6 of the HMRC document mentioned above seems to be a reference to this.

Don't get me wrong here - I'm in favour of as much tax evasion as is possible - the government (all governments) are thieving sons of bachelors and it is our duty to deprive them of as much money as possible. But it is important that we understand what we are doing and any potential consequences of out actions. There are two parallel agendas in the red diesel question - the "official" RYA position that banning red diesel sales to us will make sailing impossible for most people who are not south coast marina dwellers and the less official agenda which is trying to maintain the supply of (relatively) cheap diesel for thirsty motorboats. As a south coast marina dweller with low annual fuel consumption, I'm fairly neutral on the subject - if the Commission wins its case, I may be a few tens of pounds worse off each year, but I will still be able to buy fuel. People with modest sized motor boats based further north and dependent on commercial shipping fuel suppliers may not be so lucky. I maintain that, if HMRC had not introduced this completely unpoliced 60/40 split with so much scope for abuse, we might have had more luck arguing for a special case exemption.

 

[NormanS]

Maby, that's twice that you have said that it is illegal to have marked diesel in a tank which can supply an engine, and twice that you have been wrong. I have asked you already to show where in the regulations that this appears. I now ask you again, but I know you won't, because it doesn't exist. Please stop peddling untruths.