In a shock twist to events, the EU Commission has begun infringement proceedings against the UK for its continued use of red diesel

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The EU Commission has opened infringement proceedings against the UK for its continued use of red diesel in leisure boats.

Following a long-running fight against the end of the derogation on red diesel, as of 1 November 2008, motorboaters in the UK have been able to continue to fill up with red diesel at a split of 60% for propulsion use and 40% for domestic use. With the agreement of HM Revenue & Customs, this means that they only have to pay full duty on the fuel they use for propulsion (60%).

However, according to the RYA, the EU Commission believes this set up infringes on the EU Marking Directive 95/60/EC.

In an email sent today, the RYA quotes the Commission as saying that the “marking of fuel used for propelling pleasure boats where such fuel has not borne any exemption or rebate” undermines the common system of fiscal marking.

Gus Lewis, head of government affairs at the RYA, said, “The RYA has taken specialist taxation advice and we are advised that the continued availability in the UK of marked (“red”) diesel for use in private pleasure craft does not infringe the EU Marking Directive.

“We understand that Her Majesty’s Revenue and Customs (HMRC) has taken its own specialist advice and that this advice concurs with that obtained by the RYA. The RYA will be liaising with HMRC who will be responding to the European Commission”.

The RYA says that irrespective of whether the European Commission believes that the continued availability of red diesel infringes the EU Directive, it will continue to lobby the Commission, asking it to prevent the authorities in EU member states from penalising boaters who may have purchased red diesel in the UK.

Gus Lewis said,”Enforcing the acquis communautaire is conferred by Article 226 of the EC Treaty on the European Commission, as the guardian of the Treaties and secondary legislation.

“It is thus for the Commission alone to enforce any alleged failure of member states to fully implement obligations arising under EU Directives and the authorities in EU member states should not penalise individual yachtsmen for what they might consider to be a failing on the part of the UK Government”.