CYCC News 19 Feb 2001

Extension of Red Diesel Derogation

Reproduced from www.rya.org.uk 19 February 2001

RYA PRESSURE PAVES WAY FOR UK RED DIESEL CONCESSION

At the current meeting of European Finance ministers (Ecofin) an agreement has been reached to extend the derogation on Diesel excise duty for pleasure craft in the UK until 2007. Since identifying the impact of proposed new European wide tax harmonisation legislation back in 1998 Royal Yachting Association (RYA) have been lobbying the UK Government and its agencies to put the recreational boat operator’s point of view.

A report commissioned by the RYA, British Marine Industry Federation (BMIF) and the Inland Waterways Association (IWA) identified the impact that a three fold increase in duty would have on both the consumers and industry suppliers. This report was submitted to HM Customs and Excise to support the briefing at UK Government Finance officials at the Ecofin meeting. Subsequently it has been agreed, subject to final European Council ratification, that the current fuel derogation for pleasure Craft will remain in place until 2007.

Speaking about the decision Edmund Whelan who heads up the RYA’s Legal and Government Affairs team commented "We have been working closely with HM Customs and Excise to ensure that the views of private recreational boat owners and our concerns are fully understood. Apart from the obvious cost implications for pleasure craft owners and the potential damage to a flourishing industry, there were serious safety implications in removing the differential between petrol and diesel fuel. With the new duty likely to cost the pleasure boat user somewhere between Ł3-5 million, it was pleasing to see that they have taken on board the points we put to them."

The RYA will continue to monitor closely the progress of this decision and any other proposed legislation that might effect the boating consumers interests.