Scuttlebutt red diesel posts

[Mike21]

Been having a troll on web re taxes etc Eu directive for diesel seems to be aimed at road transport, with harmonisation of duties. As far as gas-oil( ie red diesel ?) is concerned it needs to have minimum eu fuel tax on it which at present is about 15ppl by 2010 . Fuel tax at present 6.5ppl ( after this years budget).
Can't find anything about non-commercial use of gas-oil.
Also seen comments about RYA and big boatbuilders not saying anything, but as they are part of BMF, and RYA in conjuction with BMF argued successfully for continued use of red diesel which gave us the extension till 2007 and according to RYA website are continuing lobbying for this to be extended
<A target="_blank" HREF=http://www.rya.org.uk/Default.asp?contentId=2970350>http://www.rya.org.uk/Default.asp?contentId=2970350</A>

Perhaps someone knows what arguments they put forward as I presume they would have been thoroughly researched.




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[Col]

Re: Bottom falling out of market

Some good points being made all around.
FWIW I'm not sure I would sell my boat as I would rather keep it and use it less than loose a fortune on it.
I would maybe move it to France, La rochelle is nice and moorings are cheaper than the Solent.
Having said that, I may end up staying put -BUT

1/ I would use the boat far less than I do, that means less servicing required so less VAT collected on parts / labour.

2/ If I'm not using boat so much, it means fewer nights in visited marinas so they will miss out on my £15-£30 per night (depending on marina) Less staff required / less VAT collected.

3/ The pubs / restaurants will miss out on my trade (family of 4) again less staff / VAT, as, when we are on board at the boatyard, we generally eat aboard.

Multiply this scenario with many others that will probably do the same, and there is a significant drop in trade to businesses that cater for visiting boats and boat service industry.
So does that work out as a loss or a gain for HMG?

<hr width=100% size=1><A target="_blank" HREF=http://www.arweb.co.uk/argallery/colspics> Cols Picture Album</A>

 

[Gludy]

Re: Bottom falling out of market

Probably a net loss to HMG.

All bouaters will do one of the following:-
1. As you may do - cut down significantly in all areas and boat less.
- probably equals net loss to HMG.
2. Move it abraod - total loss to HMG
3. Sell up and subsidise some leses future use in the short term.
4. Sta exactly the same as before and spend more.

My guess is that Number 4 will not be common!

The boat price drop may attract foreign buyers and many sold boats may also leave the country.

I think, as other have said, that no matter how we calculate this HMG will ignore the economic arguements - it is the list of practical problems that may help limit it.

<hr width=100% size=1>Paul

 

[Joe_Cole]

Re: Bottom falling out of market

I really don't understand this "I'm going to give up boating, so HMG will be worse off" arguement. Some may give up, but unless they are going to sit at home staring at a blank wall most of them will spend their money on something else which, guess what, will be taxed. These things are far more complex than the simplistic arguements which are being put forward here.

The Whitehall boffins are also pretty expert at forecasting the effect of tax changes and they'll be better equipped to work out if the Tax take will be +ve or -ve. From what I've seen here I'm sorry to say that many of the arguements appear to be based on what people hope will be the effect rather than what will actually happen. It gives me no satisfaction to say this, but the more I see of this debate, the more it looks to me that the concession will be removed.

Joe

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[TwoStroke]

Re: Bottom falling out of market

From what I understand of the market, the price difference is there for the running cost, plus a possible diesel re-engine. With diesel as it currently stands, after a re-engine the boat price increases and you recoup the above capital cost through the lower running costs and potential resale.

Has always been the same in the car market, diesel engine was charged at a premium due to lower running costs - with higher residual value to offset the capital expense. With diesel price now the same (if not more) than petrol at the pumps, unable to justify increase for a diesel engine, price comes down.

When running costs are similar, all prices come down to lowest common denominator - which will be petrol boats (as in car market).

I currently spend £200 / mth on petrol (at my limit here) and by switching to diesel will give me a better cruising range for that spend. If diesel goes up to petrol prices - slight increase in cruising range - the figures don't stack up and don't want a floating weekend home no matter how cheap the boat is to buy.

For so long we have all budgeted a certain amount on running costs, which gives us our cruising range for the year. To have this reduced to 25% potentially overnight will kill the industry. Look at the classic American muscle cars with the oil crisis - killed the market overnight and took 10s of years to recover. Similar will happen here.

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[Trazie]

Re:

Here in Portugal the marine diesel is the same price as road diesel, currently 79 cents per litre (about 53p).
Commercial (Charter) vessels can apply to the alfandega for tax free diesel which is almost half the price. We still fill up with the same diesel but the fill is overseen by the police who are around at set times in the day for this purpose.
Even paying full price here you are still only paying just over half of the UK forecourt prices.




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[Gludy]

Re: Bottom falling out of market

"For so long we have all budgeted a certain amount on running costs, which gives us our cruising range for the year. To have this reduced to 25% potentially overnight will kill the industry. Look at the classic American muscle cars with the oil crisis - killed the market overnight and took 10s of years to recover. Similar will happen here. "

I totall agree with that.

Assuming you can get a 5% return on capital then if your extra diesel costs after the hike are say £4000 p.a. you would need to discount your boat by 20 times £4k = £80,000.

In the case of a larger boat facing an extra say £15k per annum you would need to reduce the price by £300k.

The discounts invested would pay for the extra diesel costs. In effect it leaves many boats with negative price - you cannot give them away. If it went to the full whack - the effect would be even worse than what happened in the USA with cars because it is such a drastic increase. The net effect would be to basically kill the cruising power boat market in the UK.

<hr width=100% size=1>Paul

 

[TwoStroke]

Re:

From what my accountant has suggested - establish a charter company, or a group establishes a charter company. Have the boats coded and you could then use deisel at a commerical rate. This is one option available - possibly through an existing sailing club?? There are other apsects to look at but the idea seems solid. /forums/images/icons/wink.gif Am already looking at this for the next boat.

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[Gludy]

Re:

Great logic - its ok to have red diesel to take folks onto the water for leisure cruising purposes but if you do it yourself you get hit with full tax.

When you come to consider what a commercial boat is, the subject becomes more complex than it seems.

Is a commercilaboat any boat run for any commercial purpose? If that is the case such purposes extend well outside charter work.

Surely with charter HMG would see to it that any private use was taxed at the full rate?

To see the latest poll results or vote here is the link:-

http://194.130.49.178/testpoll.cfm?Siteref=4

<hr width=100% size=1>Paul

 

[flaming]

Re:

You pay full fuel prices when you hire a car....

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[jfm]

Re:

Same in France Trazie, except you do not have to apply to any equivalent of alfadega and the police don't stand by the tax-free pump. The fuel retailer just does some paperwork and photocopies some ship's papers, then sells tax free diesel to commercial boats

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[KevB]

Re: DERV *DELETED*

Post deleted by KevB

 

[jfm]

joeistic economics

Joe your first para is spot on, absolutely correct. It's the failure to grasp that and similar points that will result in the economic points being made elsewhere on this forum being pulled apart in whitehall

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[tico]

Re: DERV

Just to throw fuel on the fire (sorry)

I use about 2500-3000 litres of fuel each year in the boat.

my central heating uses about 3000 litres of fuel each year. Therefore same emissions, therefore by the same logic i should pay 80p/l for central heating fuel.

Can you imagine the outcry and lobbying from the oil companies as people change away from oil c/h???
Imagine the media outcry 'Pensioner freezes to death because they cant afford to fill the central heatin tank????

The environmental justification is a load of C**P viewed in that manner IMHO

<hr width=100% size=1>Been there, done that, got the oily T shirt

 

[jfm]

Re: charter use/commercial fuel

TwoStroke:
That charter idea has much merit. It is exactly what people do in France. Not sure if I mentioned, but our boat is boat is coded.

It's a somewhat separate point from the fundamental issue of whether diesel should be taxed, so I have not gone into it more on these threads, but it is a possible insurance policy in case £4/gall diesel happens. There are by the way many other tax complexities, aside from fuel tax, that you have to work around. It's an easier structure to implement in France Italy and Spain than the UK

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[KevB]

Re: Bottom falling out of market

Hi Joe,

You are right, my money will be spent on other things other than boating but it wont be in the UK. So no Tax from me except maybe a small bit on air fares.

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