3 RED DIESEL TO STAY UNTIL 2022
Leisure boat owners will be allowed to continue using red diesel until April 2022. Chancellor Rishi Sunak broke the news in last month’s Spring Budget, confirming that the current arrangements governing the use of red diesel would stay in place for another two years while the government consults on further changes.
The news was greeted with some relief after widespread speculation that red diesel could be banned altogether. This would have meant everyone from farmers to fishermen as well as private boat owners being forced to pay higher rates of duty for white diesel.
In the event the government took a more measured approach, freezing the current rules until 2022 and confirming that low duty fuel would still be available beyond that date for agriculture, rail travel and non-commercial heating as well as commercial craft such as ferries and fishing boats.
However, a new consultation will take place during the transition period with a view to removing the entitlement to red diesel beyond April 2022 for a number of other current users, including leisure boat owners. The big issue for boat owners isn’t just the higher cost of white diesel but the continued availability of fuel in remote cruising locations around the UK. Typically these are only equipped with one pump serving red diesel to their mainly commercial customers.
UK boaters are already required to pay the standard ‘white diesel’ rate for any red diesel they use for propulsion, but not for the proportion of it used by the boat’s heating or domestic power systems. However, given that most boats only have one fuel tank and no means of measuring the exact split, owners of these boats have been allowed to declare a pre-agreed 60/40 split between propulsion and heating.
From April 2022 this is likely to change. However, the Government has said it will “explore options that prevent them from having to pay a higher rate of duty on their heating use than they would otherwise have to pay.”