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Displaying items by tag: red diesel

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 IrelandRichard 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.

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.

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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 MarineLesley 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.”

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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.

Published in Cruising

The British Government has launched its long-anticipated consultation with red diesel users across the UK, including Northern Ireland, following the news of plans to restrict the fuel’s usage from 2022.

This past April the UK’s Cruising Association confirmed Westminster’s intention to legislate for a ban on the use of subsidised dyed or ‘red’ diesel except for agriculture, railway and non-commercial heating.

The move is being touted as a way to tackle climate change by giving businesses an incentive to improve their energy efficiency.

But it would also bring the UK into line with EU regulations, as has Ireland’s own ban on green diesel use for cruising and leisure boating which came into force at the start of this year.

The HMRC consultation, which is open until Thursday 1 October, will seek the input of recreational boaters, among others, to determine whether they and other sectors should be allowed to maintain use of red diesel beyond April 2022.

The UK’s Royal Yachting Association (RYA) insists that it backs efforts to increase energy efficiency in the short-term and to strive towards a zero-carbon future.

However, it also makes the case for retaining red diesel based on “existing supply needs, not colour, tax status or price”.

The RYA says: “Recreational boaters already pay the full rate of duty and VAT when purchasing fuel for the purposes of propulsion.

“We will therefore be looking at the proposals to reform the tax treatment of red diesel closely to see how this might affect the supply of fuel for recreational use for both propulsion and how it will impact supply for domestic usage such as heating.

“It is a fact that the further west and north you travel in the UK, the more likely it is that you will have to rely on waterside outlets that only supply red diesel for commercial purposes, such as to fishing fleets.

“In many places, some remote, the limited quantities of fuel used by recreational craft do not warrant the cost of installing additional equipment to supply white diesel for the recreational boating sector.

“If the Government removes the entitlement to use red diesel from most sectors from April 2022 and white diesel is then made as widely available as red diesel is now, then supply of fuel will not be affected.

“The RYA will be responding to this call for evidence and urges any members with an interest in red diesel to participate in the consultation.”

Published in Cruising
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The UK’s Cruising Association (CA) says it has confirmed with HM Revenue & Customs that it is their intention to legislate that dyed or ‘red’ diesel can only be used for agriculture, railways and non-commercial heating from April 2022.

This move would be in line with EU regulations and follows Ireland’s own ban on green diesel use for leisure boating that came into force at the start of this year.

The CA’s Regulations and Technical Services group (RATS) also confirms that the duty on standard white diesel for boats will be the same as the full rate paid on white road diesel in the UK.

This means that the present so called '60/40' fuel duty split will disappear — but commercial vessels, such as fishing boats, will still be able to claim a rebate on the full rate through their Marine Voyages Relief scheme.

But the HMRC says it is exploring the possibility of introducing a scheme that allows private pleasure craft to pay only the current lower rate for red diesel non-propulsion uses.

The CA says it “welcomes the clarification on the use of white diesel which should make it more conveniently available throughout the United Kingdom from marinas and ports as they will have to supply all marine vessels with one colour of diesel”.

The “bonus” of such a situation would be that boaters fulfil the SOLAS V regulations for sea voyages and “no longer have the concern of the presence of red diesel in their tanks when visiting EU maritime states”.

A public consultation will deal all issues involved in the proposed legislative change but there is no timetable for this amid the current Covid-19 pandemic.

A spokesperson for the CA’s RATS group says private pleasure craft from the UK should continue to legally use red diesel as they currently do, since it is still the only easily available diesel fuel at home marinas. The CA’s current advice on using dyed diesel wen visiting the EU is available HERE.

Published in Cruising

Yesterday the Chancellor of the Exchequer, the Rt Hon Rishi Sunak MP, delivered his first Budget setting out the UK Government’s fiscal priorities. Speaking to MPs in the House of Commons, he pledged greater funding and resources for the NHS to help it manage the COVID-19 outbreak. This pledge was accompanied by a bold and comprehensive package worth £30bn designed to support businesses through what the Chancellor described as a “tough” but temporary period.

Setting out the Government’s economic response, the Chancellor outlined his three-point plan to manage the impact of the virus. The first part is to ensure the NHS is given “whatever resources it needs” to cope with the spread of COVID-19. The second part includes changes to Statutory Sick Pay, including those entitled to receive it, and a dedicated £500m hardship fund for local authorities. Following the introduction of these measures, Statutory Sick Pay will be available to anyone advised to self-isolate. The third and final part of the plan includes measures to support businesses.

For companies with fewer than 250 members of staff, the Chancellor confirmed the Government would temporarily meet the cost of an employee being off work, for a period of up to 14 days. Other measures announced include a Coronavirus Business Interruption Loan Scheme worth over £1bn, grants for small business and a dedicated helpline for companies that require a deferral on their tax liabilities as a result of COVID-19.

HM Treasury has published specific guidance following the Budget which includes full details of the support available to businesses affected by COVID-19. British Marine would encourage its members to familiarise themselves with this guidance and will issue further updates as soon as we have more information on how those affected should go about accessing this support.

Speaking to MPs, the Chancellor then outlined changes to business rates. For the coming year, the business rates Retail Discount will be abolished and extended to businesses in the leisure and hospitality sectors, which under normal circumstances would be ineligible for this relief. This means that any eligible retail, leisure or hospitality business with a rateable value below £51,000 will, over the next financial year, pay no business rates. British Marine understands a formal review of business rates will take place in the autumn.

Much to the disappointment of British Marine, the Chancellor also announced that the subsidy on red diesel would be removed for most sectors, but would remain available for agricultural purposes, fishing and domestic heating. This follows speculations in different news outlets that the Chancellor was considering such a move. We understand the changes are not due to take affect for another two years and industry will be consulted on whether the entitlement to use red diesel and rebated biofuels is justified for any other users, including the continued use by ferries carrying paid passengers on the UK’s rivers and inland waterways, or public entertainment. Commercial boats on open waters, including ferries and fishing boats, will remain entitled to the Marine Voyages Relief so will not have to pay more for their fuel.

Commenting on the Budget, Lesley Robinson, CEO at British Marine, said: “It is particularly disappointing to see the subsidy on red diesel being removed across some sectors. This subsidy is of huge importance to our members in the recreational and small commercial boating sector which is heavily reliant on the use of red diesel to power recreational craft and many larger vessels.

“Our latest statistics show that participation in boating has increased over the last year and the UK’s leisure marine industry is thriving, all of which could be at risk if the Chancellor goes ahead with this decision and removes the subsidy for our sector.

“We understand that the Government will consult industry later this year and will be engaging closely with HM Treasury and HMRC officials to ensure our concerns and those of our members are fully represented and understood.”

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The use of green diesel for the propulsion of leisure craft became unlawful in the Republic of Ireland from 1 January 2020.

As Afloat previously reported, most marina fuel pumps in Ireland will only deliver fully-taxed white diesel and/or petroleum.

Below is the official Notice:

Marine Notice No. 52 of 2019
Notice to all Masters, Owners and Users of Pleasure and Recreational Craft. Prohibition on the use of marked gas oil in private pleasure craft. The [Ireland] Department of Transport, Tourism and Sport wishes to inform the public of the Department of Finance's intention to change the law regarding the use of Marked Gas Oil for Private Pleasure Navigation from 1 January 2020.

The requirement to amend the relevant legislation arises from a ruling made by the Court of Justice of the European Union in October 2018. Section 40 of the Finance Bill 2019 proposes an amendment to Chapter 1 of Part 2 of the Finance Act 1999 in order to implement the Court decision and ensure compatibility with the Energy Tax Directive (Directive 2003/96/EC) and the Fiscal Marking Directive (Directive 95/60/EC) on a legislative basis. The proposed amendment will take effect from 1 January. From that date, the use of marked gas fuel as a propellant by private pleasure craft will be prohibited.

Published in News Update
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In 2018 the Court of Justice of the European Union ruled that the UK should not allow private pleasure craft to continue to use red diesel. HMRC has just issued its consultation document which outlines the proposed change to white diesel for the propulsion of powered leisure craft, including inland boats. The document contains a number of questions for owners of diesel-powered craft.

The Cruising Association (CA) is now urging all UK boaters who use diesel fuel to respond directly to these questions. HMRC has made it clear that it will only accept responses from individuals, and not a compilation of responses.

Interested parties can access the full document, Implementation of the Court of Justice of the European Union judgment on diesel fuel used in private pleasure craft on the gov.uk website.

There are still some uncertainties about whether the CJEU ruling will actually be implemented in the UK, depending on the outcome of Brexit. Whatever the outcome, on behalf of CA members, RATS (the Regulations and Technical Services Committee), must make certain all the supply difficulties and all the problems of other stakeholders are properly and legally resolved during a workable transition period.

The CA is Britain's leading organisation for cruising sailors with 6,300 members.

Published in Cruising
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