Red Diesel Consultation with HMRC

HM Revenue and Customs has issued two papers following the consultation with stakeholders on the implementation of the Energy Products Directive.

• The Impact Assessement's final proposal is:-
  • Private pleasure vessels will continue to use marked fuel (red diesel) but at the rate for heavy oil, paying the rebated duty via the RCDOs who will declare this to HMRC. The rebated duty is currently 9.69 ppl.; the full rate is currently 56.94 ppl.
  • An allowance for domestic use will be permitted.
• The Summary of Responses document shows there were 515 responses to the consultation exercise. CYCC asked if the reasoning for not applying the minimum rate of of duty required by the EPD could be published. HM Revenue and Customs states:-

  "Under the terms of the EPD, Member States are permitted to set their own tax rates as long as they respect the minimum rates agreed and laid down in that Directive. However, once a Member State has set its tax rates it cannot introduce different rates for different purposes, except- in a few specified circumstances, such as commercial and non-commercial use of gas oil as a propellant so long as the rate does not fall below the national rate in force on 1 January 2003; and for particular uses, such as local passenger transport, waste collection, armed forces and public administration, disabled people, and ambulances. The EPD does permit a reduced rate for use 'off-road', but this applies only to industrial and commercial purposes. This represents a legal obstacle to charging different rates of duty on fuel for private pleasure boating as opposed to road fuel."