Red Diesel Dec 06

The Treasury Minister, John Healey, confirmed that the European Commission has rejected the UK Government's application to renew the UK's derogation on red diesel for private recreational boaters.
This means that as of 1 January 2007 all diesel used for private boating purposes is likely to be taxable at the same rate as road diesel, effectively doubling the existing price of red diesel to around £1 per litre. It appears that the Commission was intent on removing the derogation at any cost and has dismissed the consequences to the UK marine industry and the private recreational boater, this move will have a huge adverse impact on the UK marine industry and coastal economy.
There is also a suggestion on the BBC South West Web Site that Charter Boat Owners will also lose the derogation on our use of red diesel. It has been suggested that this will be the case unless the Charter Boat is already licensed to land fish for sale via the commercial market. If this is so, this issue will undoubtedly further damage UK leisure fishing from licensed Charter boat's as the loss of the red diesel concession will add around 48 pence to every litre of red diesel we use, this will more than double our fuel cost's and the increase will obviously have to be passed on to our customers. It is likely to cause serious hardship to those directly affected by the final ruling.
The Seeing Red Campaign, pushed by the RYA, the British Marine Federation (BMF) and the Inland Waterways Association (IWA) was successful in so much as it helped the UK Government to recognise and accept the problems that the loss of the derogation would bring and to fight for the derogation to be retained. However, despite the considerable efforts of the campaign partners and the Government, they were unable to halt the EU’s march on tax harmonisation.
What happens now? - Although the derogation officially ends on 31st December, nothing will happen for the moment. The government has to work out what measures are necessary, how to enforce them and in what timeframe this will take place. The Treasury Minister, John Healey, made it clear to the Commissioner that the UK will need a transitional period in which to implement the changes required. The Commissioner acknowledged this but ultimately the Commission has to agree to such transitional arrangements. The impact of a more than twofold increase in our fuel prices will not simply be the extra cost of fuel on a days fishing as the significant compliance costs via the marinas and boatyards together with security costs and investment in new infrastructure (tanks, pumps etc.) will all have to be paid for. We will just have to wait and see.
As a good friend of mine pointed out, if the proposed changes are all related to harmonisation of duties on fuel across the member countries of the EEC, how come we are not hearing any whispers proposing reducing Tax and Excise duty on petrol, white diesel, booze, cigarettes, etc. in the UK? Only this past week, Gordon Brown has been quoted as contemplating increasing "Green" taxes on UK fuel. We are an easy target for this new 'scam' as the Government will say our use of fuel is not necessary, and is adding to the Global warming problem. I think we all might have to learn to sail, we seem to have more than our fair share of wind at the moment.

Back