Red diesel to remain until November 2008

Chancellor gives boaters over a year to prepare for switch

Low-duty diesel for leisure boaters will officially be lost on 1 November 2008, the Chancellor announced today.

He also revealed that from 1 October this year, duty on red diesel would rise 2p, from 7.69p to 9.69p.

In the Economic and Fiscal Strategy Report, published alongside the budget, the Treasury said: “A number of derogations to the Energy Products Directive, which allowed the Government to charge a reduced rate of duty on fuels used in private pleasure boats and planes, and on waste oils, expired on 31 December 2006.

“The European Commission has to date declined to renew the majority of derogations for all member states, including the UK’s derogations for private boats and planes.

“The Government will implement the changes required on 1 November 2008, after further consultation with industry about the best way to minimise the longer-term compliance burden on the sectors concerned.”

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The RYA was among the first to welcome the news. Neil Northmore, the RYA’s government affairs advisor, said: “We welcome the long consultation period. It’s essential that the Government carefully considers all the options to introduce a regime that minimises the impact on the user and the industry.”

MBM editor Simon Collis said: “By introducing a long period of transition, the Government has taken the first step in finding a sensible solution. Now we need an implementation that is reasonable and enforceable.”

Just what will result from this consultation is unclear, although early speculation hints at red diesel remaining indefinitely, with fuel vendors being made to switch between higher and lower rates of duty at the pump for commercial and leisure users.

This would certainly solve the enforcement nightmare that is red diesel remaining in tanks for years to come and it would also save a lot of time and money after Customs said recently that boaters would have to clean their own tanks of red diesel if the switch to white was made.

For more on this story, make sure you pick up May’s issue of MBM.


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