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The proposed draft legislation on red diesel, announced by HM Revenue & Customs on 21 February, is open to public consultation – but this ends on 11 March.

The controversy over the proposal (see related PBO web stories, links below) shows no sign of abating. The RYA is challenging the proposal and the Cruising Association is calling for it to be withdrawn.

The nub of the proposal, due for implementation on 1 April, is this: ‘The measure provides that red diesel for use as fuel for propelling private pleasure craft can only be used in UK waters. All purchasers of red diesel for use as fuel for propelling private pleasure craft will be required to sign a declaration to that effect.’

A copy of the full proposal can be downloaded here.

HMRC hope that limiting red diesel use to UK waters will reduce the risk of the European courts ruling against the UK over our continued use of red diesel in pleasure craft – a dispensation we have enjoyed since 2008, based on the supposition that 40% of the diesel in our boats’ tanks is used for heating purposes, and thus liable to a lower rate of tax. The European Commission has challenged this practice.

Some EU countries with different tax arrangements have penalised boat owners found in their national waters with marked diesel in their tanks, although so far only Belgium has fined British boat owners.

But use of marked diesel in international waters is not breaking any laws. This calls into question the validity of HMRC’s proposal.

If you wish to express an opinion on the proposal, email your comments to HMRC, by 11 March, via the HMRC website (click on the link envirotax.bst).

Alternatively you may post them to:
Transport Taxes Team
HM Revenue & Customs
Room 1/37
100 Parliament Street
London SW1A 2BQ

Further advice can be found on the websites of the RYA and the Cruising Association.

Related stories:

RYA: Using red diesel in foreign waters will not be unlawful

Red diesel to be legal only in British waters

Vote in our latest – red diesel-related – PBO poll