Will there be a smooth transition from duty free to duty paid diesel? I think not

Now here’s a fine mess. As we all know the benefits of duty free ‘red’ diesel that yachtsmen and powerboaters have enjoyed for years are due to end shortly. Although there were dire predictions about the effect this would have on the sport and the industry, powerboats in particular, it looks as though the blow will not be as hard as many feared.

You’d think that the transition from duty free to duty paid would be simple. Well it’s not. First of all because commercial craft and fishing boats will still be eligible for duty free fuel, which will still be dyed red to indicate its status. So this means that marinas with fuelling berths and other re-fuelling stations would need to install a second tank and pump for non-red duty paid fuel. Not so said the RYA, we will petition so that all boats can continue to use red diesel, with pleasure craft paying duty and commercial not.

This seemed a pretty and pragmatic good answer to the problem. Except that the Dutch and German authorities have made it clear that although they have called a moratorium on arresting and fining yachts found even with traces of red diesel in their tanks they will continue to do so once British yachtsmen fall into line with the rest of Europe and pay duty on marine diesel.

There’s another fly in the ointment or bug in the fuel. The Inland Waterways Association are calling for diesel used for heating and the generation of electricity to be exempt, as it would be for domestic heating oil. And because in most boats it is not practicable to fit a second tank for these purposes their research indicates that boats used on the inland waterways use 75% (taxable) for propulsion and 25% (duty free) fuel for heating and power generation. There’s no reason to suspect that marine useage would be much different.

The IWA propose that at the point of fuel purchase, boaters could sign a declaration and receive an immediate 25% tax rebate in the price they pay at the pump. Dream on!