red diesel

[maby]

Do you actually reclaim the VAT or do you offset it against VAT you are required to charge your customers?

Well, in most cases we offset against VAT that we are required to charge our customers, but there have been a few occasions where a major investment has meant that there was not enough VAT charged to customers to completely cover the sum to be reclaimed and we have actually received a cheque from HMRC. Admittedly, that is not common for an established company with a healthy balance sheet and I don't think it has applied to us for many years.

 

[maby]

I see your point about making the commercial vessels reclaim the tax, but as you say HMRC are trying to reduce processes (hence the introduction of the flat rate VAT system), and commercial users certainly wouldn't want any extra paperwork. Also, there would still be the possibility for duty reclaimed White diesel to end up in a road vehicle.

I suspect that the risk of fraudulent use of duty free diesel would be significantly less - if red diesel were phased out altogether, it would be impossible to purchase the fuel without paying the tax and the reclaim process would leave a paper trail that is currently weak or non-existent. As it stands, a farmer or boatyard can purchase thousands of gallons of tax free marked fuel and that is effectively the end of the formal audit trail. OK, if a farmer with one small tractor is purchasing tens of thousands of marked fuel each year, they may attract attention, but they don't have to submit detailed accounts of where it all went and it's easy enough to put some in the Range Rover and flog some off at the pub.

 

[prv]

they don't have to submit detailed accounts of where it all went and it's easy enough to put some in the Range Rover and flog some off at the pub.

...but farmers' range-rovers do get dipped from time to time, and any red will show up. A uni mate of mine got checked several times in a shagged-out old diesel car in a farming area. Whereas who's to say how much tax-reclaimed white got burned on a fishing trip and how much got landed and flogged on? At which point it becomes undetectable, and it's going to be pretty hard to build a case from little more than some very rough consumption estimates and the number of days the boat was out.

Pete

 

[Sailorsam101]

Thanks Maby. Where I'm currently moored there are a mixture of commercial and leisure craft. I suspect it would not be viable for them to install another tank to keep the two separate. However, surely this could now be reversed as commercial vessels would have nothing to gain by putting in road diesel from a source other than a marina although of course some may still use heating oil I suppose so a commercial vessel could have dyed or 'clear' diesel whereas a leisure vessel would only have clear diesel allowed which they would obtain either from a marina or portable containers with road diesel. Therefore travel to areas which have banned red diesel would only be an issue for commercial vessels which would probably have better records of where their fuel comes from (you'd like to think). It seems to me as if the current system has not taken in to account the new taxation impact.

Heating oil is not Diesel...it has a different burn rate. I once lived on a farm that had oil heating and it was converted to run on red diesel not heating oil. I had to make sure I ordered the right stuff or it would not work.

 

[piratos]

I am afraid that the problem with red diesel ist not a EU problem. If diesel is coloured red it is to show that its "taxfree". Higher diesel prices in UK also has nothing to do with EU - its the government who make its own tax policy.

Actually you can - legally - have red diesel onboard any boat within the EU, as long as its seperated in tanks and not used for propulsion, e.i. you can have red diesel onboard for your heating, genset etc.

In other countries (EU or not) taxfree diesel is also coloured, and there seem to be no problem to have tax refunded if used commercially (like somebody compared to VAT)

Actually general de Gaule was right when he once said that if UK become an EU member it will be the beginning of seperate special agreements....

There is a lot to blame EU for, but dont blame them for "homemade" problems. If the UK government wanted to they could have solved this easily

 

[BartW]

I am afraid that the problem with red diesel ist not a EU problem. If diesel is coloured red it is to show that its "taxfree". Higher diesel prices in UK also has nothing to do with EU - its the government who make its own tax policy.

Actually you can - legally - have red diesel onboard any boat within the EU, as long as its seperated in tanks and not used for propulsion, e.i. you can have red diesel onboard for your heating, genset etc.

In other countries (EU or not) taxfree diesel is also coloured, and there seem to be no problem to have tax refunded if used commercially (like somebody compared to VAT)

Actually general de Gaule was right when he once said that if UK become an EU member it will be the beginning of seperate special agreements....

There is a lot to blame EU for, but dont blame them for "homemade" problems. If the UK government wanted to they could have solved this easily

Completely agree with that,
I’ve always’s had this kind of thought when brits are discussing the red diesel issue,

Imho, this red diesel thing is a result of a compromise between the brits government , and the stubborn and conservative UK boating community, Ignoring the real facts.
(excuses for this naughty thinking )

-the price of your 40/60 red diesel compromise is still more than our normal road diesel,
So the whole "taxfree" debate doesn,’t make sense.

-In most places in Europe, marine white is exactly the same as white car diesel,
And apart from opportunistic marine price inflation, and less competition between the near water fuel stations, the pricing is nearly the same

-In Europe you can nowhere buy red diesel for marine use, red diesel is only used for heating (less quality) or for agriculture, or for bulldozers that don’t come on the road.
Taxfree marine diesel for professional usage is Blue.

Fe fishing boats or other professional vessels can use blue diesel without a problem.
The fuel supplier has to check if the buyer has right papers / pro registration, etc..

There is something similar for chartered pleasure yachts, but there again, you need the right papers to obtain Blue diesel. Suppliers are really tough on that, because if the paperwork is not correct, they might be penalized to pay the tax at later date.

By the way,
I don’t think it is possible to have VAT, and definably not TAX refunded when a professional user has bought fully taxed diesel, I never ever heard about that,
It is hard enough for a professional user to obtain the status of the professional usage, fe a training boat for teaching, to obtain blue Diesel.
Even for professionally used Cars or Vans, its not possible to get a 100% refund on VAT (at least in Belgium anymore)

and one more remark,
atm I keep my boat in Montenegro, (outside europe) and there it is possble to buy "white taxfree diesel" for any boat owner, on condition that you leave the country after fueling the boat (customs paperwork is done simultaniously when taking fuel)
The idea is a bit similar to buy something in the taxfree shop in the airport before departure.