Government consults on red diesel tax bill
THE GOVERNMENT has issued a ‘call for evidence’ regarding the use of red diesel – which offers an opportunity for boating interests to put their arguments forward regarding the use of lower duty fuel in boats, which could be up for reconsideration following Brexit.
Use of low duty red diesel for leisure boating was formerly permitted in the UK. However the European Commission refused to renew the derogation allowing this, leading to the present situation where boaters can put red in their tanks but must declare what proportion of it they will use for propulsion (as opposed to heating and other uses) and pay the higher rate of duty (equal to road fuel, known as DERV) on that part.
This still didn’t satisfy the EC, which threatened to take the UK to court to force boaters to use DERV; however this has been overtaken by the result of the EU referendum.
The Government consultation is mainly about gaining more understanding of red diesel use as a result of concerns about the impact of all types of diesel on air quality (especially when concentrated in urban areas), rather than in connection with the European situation. However it offers the opportunity to comment on all aspects of the red diesel rules – including what uses are permitted.