Boating bodies "pleased" with HMRC's position on red diesel

The Royal Yachting Association (RYA) and British Marine Federation (BMF) released a joint statement today, saying the path chosen by HM Revenue & Customs to keep red diesel for leisure boaters but make them pay a top rate of duty (56.94 pence per litre) at the pump was the “common sense solution”.

MBM broke the news yesterday that HMRC had decided on this path after a period of consultation last year.

The decision will see boaters paying more duty on fuel than any other non-commercial users in the country, with prices for diesel expected to shoot to well over £1 a litre from 1 November. VAT on this fuel will also jump from its rebated rate to a full 17.5%.

Heating oil, however, will still be subject to the rebated rate, and boaters will have to declare how much of the fuel they are taking on is for heating purposes.

Commercial users will remain paying the rebated rate on red diesel (9.69ppl), whatever its use.

Howard Pridding, executive director of the BMF, said: “While no-one is going to pretend that the duty increase on red diesel is a good thing, we are pleased with how HMRC has managed the consultation process and the position that they have finally adopted.

“There were real fears that the marine industry would be hit with significantly increased costs and administrative burdens but HMRC has listened to our concerns and come up with a system which the BMF feels able to support.

“The proposed system spreads the burden between boaters and the industry in a fair way and hopefully will ensure that, with the industry able to keep the existing infrastructure, boaters will still be able to access fuel in convenient locations.”

The RYA and BMF also confirmed that boaters will have to self-declare whether they are running a commercial or recreational vessel, and how much of their fuel will be used for heating. A false declaration will become a criminal offence, HMRC said.

The details of just how this declaration will be made is still subject to negotiation.