Displaying items by tag: red diesel
The UK has been fined €32m by the European Court of Justice (ECJ) for allowing pleasure boats to use red diesel before Brexit came into effect.
Under EU law, only commercial boats can use lower-tax dyed diesel, following a ruling by the ECJ in October 2018.
In Ireland a ban on green diesel use by pleasure boats came into effect on 1 January 2020. But a similar ban was not introduced for red diesel use in Northern Ireland until October 2021.
The ECJ brought proceedings against the UK in early 2020, and said the rule had applied to the whole of the UK for almost three years since the original ruling, therefore it was irrelevant that it only applied in NI since Brexit came into force in January 2021.
The court also determined that even though the UK is no longer a member state, it is still bound by some EU rules because of Northern Ireland’s unique position within the single market — meaning that its fine was based on the size of the UK’s economy as a whole.
Marine Industry News has more on the story HERE.
UK Boaters Reminded of Dos and Don’ts of Running on Red Diesel
Heading into the new season, recreational boaters in Great Britain are reminded of their responsibility to ensure they make the correct declaration when purchasing red diesel.
The RYA announced in March 2021 that recreational boaters would retain the right to purchase red diesel at the waterside in Great Britain provided the full rate of duty was paid when purchasing fuel for the purposes of propulsion.
Regrettably, in Northern Ireland recreational boaters did not receive the same benefit and are no longer able to use red diesel for propulsion. Read more about the red diesel ban in NI and what boaters need to know HERE.
An essential part of the new law in Great Britain is that recreational boaters buying red diesel must declare the percentage of fuel being used for either propulsion or for domestic usage. If you are purchasing red diesel, then there is always a possibility that HMRC will ask to see fuel receipts and evidence of usage.
Retaining access to red diesel for recreational boaters at the waterside is an entitlement that should be valued to ensure supplies are available in the more remote ports and harbours. It is crucial that the processes in place are respected to ensure that it is not jeopardised.
The RYA reminds UK boaters of the following dos and don’ts when it comes to purchasing and using red diesel to power recreational vessels:
- Do not assume a split of 60% for propulsion and 40% for domestic use if this does not accurately reflect your intended use.
- If in Northern Ireland, do not put red diesel into the tank of a private pleasure craft for propulsion purposes.
- When buying diesel for your craft, do make a declaration to the supplier based on your intended use.
- Declare what percentage of the fuel will be used for propulsion (as opposed to domestic purposes such as heating or cooking). There is no fixed allowance for propulsion vs domestic purposes.
- If your primary residence is your boat, It will help to have documentation available which confirms this when buying fuel for domestic use.
- If you are visiting Northern Ireland from GB, do retain receipts to show that the fuel was purchased in GB.
- Do always retain receipts when purchasing red diesel, especially when visiting other countries. It is also useful to log engine hours.
If you have any questions regarding the purchase and usage of red diesel, visit the Cruising pages in the RYA website or email the RYA Cruising team.
What Northern Ireland Boaters Need to Know About Red Diesel Ban
As reported earlier this year on Afloat.ie, the ban on the use of red diesel to propel private pleasure craft in Northern Ireland has come into effect.
As of 1 October 2021, following an extension from this past summer, private pleasure craft in Northern Ireland must use diesel, biodiesel or bioblend on which duty has been paid at the full (unrebated) rate in the motor used for propulsion.
Vessels with one fuel tank (for both propulsion and non-propulsion) cannot use red diesel unless it was put into the fuel tank either in:
- Northern Ireland before 1 October 2021; or
- a jurisdiction where using red diesel for propulsion of private pleasure craft is legal post-Brexit, such as Great Britain, the Channel Islands and the Isle of Man.
Boaters who travel to Northern Ireland having refuelled with red diesel elsewhere are advised to keep documents (such as receipts, logbooks and declarations) to show HMRC where and when the vessel was refuelled.
Private pleasure craft in Northern Ireland (including houseboats) with separate tanks for propulsion and non-propulsion uses may continue to use red diesel in the non-propulsion fuel tank — but the supplier cannot allow any discount on the ‘white’ diesel because it is all being used for propulsion.
In addition, any residential craft with a single tank supplying an engine which does not propel the vessel may continue to use rebated (red) diesel.
Fuel suppliers in Northern Ireland who sell white diesel for private pleasure craft with a single fuel tank can register for a new HMRC relief which allows to deduct at point of sale an amount equal to the duty rebate on 40% of the total volume of white diesel supplied.
More can be found in Excise Notice 554 (Fuel used in private pleasure craft and for private pleasure flying) on the Gov.uk website HERE.
HMRC has issued Excise Notice 554 which contains details about fuel used in private pleasure craft.
For Northern Ireland (NI), private pleasure craft users will no longer be able to use red diesel to propel their craft, but the deadline date for this has been extended to October 1.
As Afloat reported last month, this gives more time for private pleasure craft to use up red diesel in NI and their fuel suppliers to implement the change from red to white diesel.
There will be a new relief scheme on non-propulsion fuel for heating and power generation – see paragraph 2.3 of the Notice.
The Cruising Association's Regulations and Technical Services group (RATS), has pointed out that pleasure craft from NI may travel to Great Britain and fill up with red diesel. RATS advice is to keep up-to-date all receipts, logbooks and engine hours, to show HMRC where and when you refuelled.
For England, Scotland and Wales, the current red diesel position stays the same. Diesel used for propulsion is taxed at the full duty rate, as for road diesel. Red diesel to be used for heating, lighting and power generation may be purchased at the rebated rate. RATS has suggested that purchasers should be able to give the exact percentage to be used for propulsion and heating and not necessarily the suggested HMRC 40/60 split.
The full details on the procedures and purchase of marked gas oil (red diesel), including the rare situation of a vessel having a separate tank for heating, are in Chapter 4 of Notice 554. HMRC has been contacted for clarification on certain points and RATS awaits its reply. Further guidance is due in July.
Full details of the fuel regulations can be read here
The British Government has announced a three-month delay in the implementation of the red diesel ban for private pleasure craft in Northern Ireland.
The move follows lobbying by Bangor Marina and others in the NI leisure boating industry who emphasised the dearth of white diesel options in the region.
Originally set to come into effect on 30 June, the red diesel ban is intended to meet the UK’s obligations under the Northern Ireland Protocol and bring the region in line with the 2018 judgment by the Court of Justice of the European Union.
This is the same ruling which prompted the Republic of Ireland’s ban on green-dyed diesel for leisure craft propulsion last year.
In March, British Chancellor Rishi Sunak announced in his first post-Brexit Budget that boaters in England, Scotland and Wales would continue to use red-dyed diesel for pleasure boating without penalty in domestic waters — leaving NI boaters in limbo.
Bangor Marina says it met earlier this year with officials from HM Revenue & Customs, HM Treasury and RYANI “to discuss the difficulties we would face if we had to switch to white diesel in June.
“During that meeting, we did put forward a compelling proposal that the switch to white diesel should take place after the summer holidays.
“Today [Friday 21 May] we have been advised by HM Revenue & Customs that the UK government has decided to delay the implementation of the prohibition on red diesel used for propulsion of private pleasure boats in NI until 1 October 2021.
“More detailed guidance is expected to be produced in July.”
The decision will come as a relief for cruisers and leisure boaters across Northern Ireland as it emerges from lockdown into the summer boating season.
But with freedom of movement on the cross-border Shannon-Erne Waterway, the extension poses a “customs headache” for Irish authorities, a source close to Afloat.ie suggests.
And if the delay is any indication of a proclivity to continue moving the deadline back, the situation would deal a heavy blow to Irish suppliers, particularly in border areas — while also encouraging boats “to spend more time in NI and less [in the Republic]”, the source added.
RYA Northern Ireland Seek Further Clarity on Red Diesel Withdrawal from Recreational Boaters
The Royal Yachting Association of Northern Ireland (RYA Northern Ireland), together with British Marine and the Cruising Association, met yesterday with representatives from HM Revenue and Customs and HM Treasury to discuss the difficulties for private pleasure craft in Northern Ireland resulting from the decision to withdraw the use of red diesel.
Recreational boaters and the marine industry urgently need clarity surrounding the Government's plans for implementation and how it intends to address the practical difficulties before June.
As Afloat reported earlier, the Cruising Association has said no white diesel supply exists in Northern Ireland leaving boaters without options later this summer
The discussions took place against the background of the Protocol on Ireland/Northern Ireland and in particular Article 8 concerning Union VAT and excise law that applies to Northern Ireland.
To achieve consistency with the 2018 judgment by the Court of Justice of the European Union and to ensure that the UK meets its international obligations under the Protocol, private pleasure craft users in Northern Ireland will no longer be able to use red diesel for propelling their craft.
It is proposed that this change will take effect by June this year. The RYA has stressed the difficulties presented by this short timescale and requested a longer period to address the white diesel supply issues that the decision presents. Once implemented, private pleasure craft users in Northern Ireland will have to use white diesel for propulsion instead of red diesel.
Private pleasure craft users in Northern Ireland with only one fuel tank on board for propulsion and non-propulsion will not have to pay a higher rate of duty on their non-propulsion use of diesel than they would otherwise have to pay. The Government are intending to introduce a new relief scheme in Northern Ireland which will become effective from the date that users become obliged to use white diesel.
The RYA is concerned that the volume of sales of diesel to private pleasure craft is not great enough for suppliers to justify the expense of providing a second pump at the waterside, which is going to cause significant supply problems.
HMRC have confirmed that once the change does take effect, it would be illegal to buy red diesel for private pleasure craft propulsion in Northern Ireland, but fuel already present in tanks could be used without penalty. Private pleasure craft from Northern Ireland that fill up in Great Britain (GB) in future could do so under the Istanbul Convention which will allow red diesel legitimately purchased in GB to be taken back to Northern Ireland in the main fuel tanks of a boat.
The RYA recommends that recreational boaters with marked 'red' diesel purchased in GB:
- Keep receipts for diesel purchased in GB, to prove that it was bought in the GB, and request that your retailer marks them "duty paid."
- Log the date of refuelling and engine hours to reinforce these records; and
- Do not carry marked diesel anywhere other than in their craft's main fuel storage tanks.
Chief Operating Officer of RYA Northern Ireland, Richard Honeyford, commented: "RYA Northern Ireland welcomes that there will be a new duty relief scheme in place to help avoid disproportionately penalising Northern Ireland boaters and details of this scheme are to follow.
"We also welcome a number of clarifications from HMRC and look forward to continuing to work closely with RYA, HM Treasury and HMRC to ensure that boaters in Northern Ireland are clear on all guidance. RYA Northern Ireland will continue to update its members as and when further information is available."
Howard Pridding, RYA Director of External Affairs, commented: "The meeting with Government was productive and both sides now have a clear idea of the issues ahead. We will continue to work with our colleagues in RYA Northern Ireland to talk to Government about the practical difficulties that these issues present and work constructively with HM Treasury and HMRC officials to develop guidance that will inform boaters about the new fuel situation in Northern Ireland."
Hundreds of recreational boat owners in Northern Ireland could be affected by an HM Treasury decision outlining that from June they will be required to use white diesel instead of red.
As part of the Spring Budget announcement, the UK Government stated that it is not changing the treatment of private pleasure craft in Great Britain. They will continue to be able to use red diesel and pay their fuel supplier the difference between the red diesel rate and the white diesel rate on the proportion they intend to use for propulsion.
However, in Northern Ireland, recreational boaters will no longer be able to use red diesel for propelling their craft and will need to use white diesel from June onwards.
The government response to the consultation outlines: "In Northern Ireland, private pleasure craft users will no longer be able to use red diesel for propelling their craft. This will achieve consistency with the 2018 judgment by the Court of Justice of the European Union (CJEU) and ensure the UK meets its international obligations under the Northern Ireland Protocol of the Withdrawal Agreement.
"It will also align with fuel used by private pleasure craft in the Republic of Ireland, which should make it simpler for private pleasure craft users to access the fuel they need if they sail between Northern Ireland and the Republic of Ireland (and vice versa)."
The RYA Northern Ireland, which is the governing body for sailing, windsurfing and powerboating in Northern Ireland, is seeking clarity on the changes for Northern Ireland.
Richard Honeyford, Chief Operating Office for RYA Northern Ireland, explains: "While the rationale to keep private pleasure craft in line with commercial entitlements has been taken in Great Britain, the same rationale does not appear to have been applied in Northern Ireland.
Richard Honeyford, CEO of RYANI -"Many boat owners cruise to Great Britain, where only red diesel will be available. We will also need clarity around how this may be considered on returning to Northern Ireland"
"This will provide a number of immediate challenges across both inland and coastal waterways, where there is little or no waterside infrastructure currently in place in order to supply white diesel to recreational craft. At the moment, there are pumps for red diesel and to change this will take time and expense in order to develop adequate and accessible supply across all bodies of water and within the given timeframes."
He adds: "RYA Northern Ireland is also asking for clarification on how the new rules may be regulated. We welcome some indications on how HMRC would view the 'run off' of red diesel in tanks. With current lockdown restrictions, many boat owners have filled their tanks with red diesel, for example, to avoid condensation, and this needs to be considered to avoid boat owners becoming inadvertently caught out by these changes.
"Many boat owners cruise to Great Britain, where only red diesel will be available. We will also need clarity around how this may be considered on returning to Northern Ireland."
Honeyford says: "We welcome that there will be a new relief scheme in place to help avoid disproportionately penalising NI boaters, however, we await details of this scheme.
"Our current advice to boat owners is to retain all receipts, including VAT, in relation to the purchase of red diesel up to any changeover date, and then any subsequent receipts proving the purchase of white diesel."
RYA and RYA Northern Ireland have requested a meeting with HMRC to outline these concerns and seek further clarification.
No Red Diesel for Northern Ireland Boaters
Northern Ireland recreational boaters will no longer be able to use red diesel for propelling their craft.
This is despite the British Chancellor Rishi Sunak announcing on Wednesday, as Afloat reported here, that UK sailors will still be able to use red diesel to propel their vessels.
The reason behind the NI omission of course is to ensure the UK meets its international obligations under the Northern Ireland Protocol of the Withdrawal Agreement following Brexit.
Last year, the UK Government announced it would remove the subsidy on red diesel from April 2022, although boaters would still be able to use subsidised fuel for heating onboard.
As regular Afloat readers will recall, it followed a consultation with the sailing industry and commercial boat owners after a ruling by the Court of Justice of the European Union (CJEU) in October 2018 that the UK wasn't complying with the EU Fuel Directive by allowing leisure vessels to use marked diesel.
Green Diesel Ban
A similar ruling was made against Ireland, which had green diesel. From 1 January 2020, the use of green diesel to solely power pleasure boats was banned.
The U-turn by the Government only applies to recreational boaters in Scotland, Wales and England.
Use of Red Diesel to be Maintained for all Commercial Boat Operators & for Private Pleasure Craft Users in Great Britain
Use of red diesel will be maintained for all commercial boat operators and for private pleasure craft users in Great Britain following the UK's Spring Budget 2021 announcement.
Lesley Robinson, CEO of British Marine called it a 'Red-letter day' for the marine industry. “After months of extensive consultation and discussion with HM Revenue and Customs (HMRC), I am delighted that the Chancellor has today announced that the entitlement to use red diesel will be maintained for all commercial boat operators and for private pleasure craft users in Great Britain.
In a statement, British Marine said: “This is a big success story for the leisure marine industry and British Marine as the treatment of red diesel beyond April 2022 has been a key issue for our members. I am particularly grateful to colleagues at HMRC for working closely with British Marine, listening to industry feedback and giving the leisure marine sector the certainty needed at this unprecedented time.
Lesley Robinson, CEO of British Marine
“Today’s announcement has also brought further relief with the Chancellor repeating his pledge to do ‘whatever it takes’ to help businesses impacted by COVID-19. The decision to extend the furlough scheme until the end of September is very welcome and will help to prevent further job losses across the sector, particularly as our members prepare for the start of the next boating season.
“We particularly welcome the introduction of further grants for businesses impacted by the restrictions put in place to control COVID-19. The extension of the business rates holiday for the retail, leisure and hospitality sectors until the end of June, combined with the announcement that the 5% rate of VAT will remain in place for the hospitality sector until the end of September, will be of huge benefit to our hire boat operators and accommodation providers. The announcement of further loans of up to £10 million in value is another timely lifeline which will support businesses of all sizes with more immediate cash-flow concerns.
“Today’s Budget will play a key role in supporting the roadmap out of lockdown and gives businesses in the sector more confidence as they look to restart ahead of what is anticipated to be another busy ‘staycation’ summer in the UK.”
‘Istanbul Convention’ Should Apply for UK Boats With Red Diesel Cruising in EU Waters, CA Says
Marine red diesel is still on sale to leisure vessels in the UK despite Westminster’s pre-Brexit plans to phase it out, the Cruising Association says.
As previously reported on Afloat.ie, the British Government made clear its intention to legislate for a ban on the use of subsidised dyed or ‘red’ diesel except for agriculture, railway and non-commercial heating.
It follows a judgment from the European Court of Justice that also necessitated Ireland’s own ban on green-dyed diesel use for cruising and leisure boating which came into force at the start of 2020.
Now that Britain has left the EU, red diesel will continue to be legal for the propulsion of vessels in the UK until April 2022, says the body that represents Britain’s small-boat cruising community.
However, red diesel in craft engine tanks is not permitted in the EU27 and other countries — including Ireland.
The CA’s Regulations and Technical Services group (RATS) says it has received information from HM Revenue and Customs that they agree the Istanbul Convention of 1990 allows vessels to make visits to the EU27 and elsewhere without import prohibitions or restrictions on propulsion fuel.
This includes visiting craft with UK red marine diesel — or red dye traces — in their engine tanks, it adds. But it is unclear whether EU27 countries will implement their own laws in accordance with the Convention as expected.
The situation is also different in Northern Ireland, where the Northern Ireland Protocol means relevant EU directives will continue to apply.
“If this affects what fuel private pleasure craft (PPC) in Northern Ireland can use, HMRC will provide an update at the appropriate time,” the CA says.
