Red Diesel use for Boat Propulsion

[PurpleFox]

As someone with a petrol boat looking to upgrade to a boat which is probably diesel powered can someone please explain. This is for use in England, not NI or mainland Europe.

I understand that the rules changed in April this year but what I read online is confusing.........

RYA said:

Although entitlement to use red diesel and rebated biofuels is changing from April 2022, this does not alter the arrangements for pleasure craft in GB as ‘fuel for all marine craft’ remains a qualifying purpose and that includes propelling private pleasure craft in GB

So propuslsion on a pleasure craft qualifies for red diesel use?

But then why does it then go on to say:

RYA said:

Red diesel continues to be available at the waterside in GB but recreational boaters must pay the full rate of duty when purchasing fuel for the purposes of propulsion.

Confused.

[andy97]

PurpleFox said:

As someone with a petrol boat looking to upgrade to a boat which is probably diesel powered can someone please explain. This is for use in England, not NI or mainland Europe.

I understand that the rules changed in April this year but what I read online is confusing.........

RYA said:

Although entitlement to use red diesel and rebated biofuels is changing from April 2022, this does not alter the arrangements for pleasure craft in GB as ‘fuel for all marine craft’ remains a qualifying purpose and that includes propelling private pleasure craft in GB

So propuslsion on a pleasure craft qualifies for red diesel use?

But then why does it then go on to say:

RYA said:

Red diesel continues to be available at the waterside in GB but recreational boaters must pay the full rate of duty when purchasing fuel for the purposes of propulsion.

Confused.

I am no expert, but I read, “qualifying purpose” as qualifying for duty, and that seems to be backed up by the second RYA extract.

[Audis5b9]

PurpleFox said:

As someone with a petrol boat looking to upgrade to a boat which is probably diesel powered can someone please explain. This is for use in England, not NI or mainland Europe.

I understand that the rules changed in April this year but what I read online is confusing.........

RYA said:

Although entitlement to use red diesel and rebated biofuels is changing from April 2022, this does not alter the arrangements for pleasure craft in GB as ‘fuel for all marine craft’ remains a qualifying purpose and that includes propelling private pleasure craft in GB

So propuslsion on a pleasure craft qualifies for red diesel use?

But then why does it then go on to say:

RYA said:

Red diesel continues to be available at the waterside in GB but recreational boaters must pay the full rate of duty when purchasing fuel for the purposes of propulsion.

Confused.

I may be wrong, but my understanding is that red diesel is available at most marine fuel pumps as commercial operators can purchase it at reduced duty rates, and recreational operators can purchase it at full duty for propulsion only (or a split, like 60:40 with reduced duty on one part of the split when it is used for heating the boat and for propulsion)

So rather than limiting your fuel pump to one market, the correct duty can be applied instead.

Hope that makes sense.

[Hard-Drive]

Audis5b9 said:

I may be wrong, but my understanding is that red diesel is available at most marine fuel pumps as commercial operators can purchase it at reduced duty rates, and recreational operators can purchase it at full duty for propulsion only (or a split, like 60:40 with reduced duty on one part of the split when it is used for heating the boat and for propulsion)

So rather than limiting your fuel pump to one market, the correct duty can be applied instead.

Hope that makes sense.

Yes, quite right, 60/40 split for propulsion/heating. That said, I know of many people who buy it at that split rate who don't even have a diesel heater or calorifier. Not that HMRC are likely to come knocking.

However the sad reality that with fuel prices recently it's sometimes not been any cheaper than garage forecourts!

[Evoluzione]

So what you are saying is that there are varying rates of taxation of red dependent on end use?
So I go along, tell the chap i'm using it for whatever is at the lowest rate, then use it in something which demands the higher rate?
That doesn't sound right....

[Simpo Two]

Evoluzione said:

So what you are saying is that there are varying rates of taxation of red dependent on end use?
So I go along, tell the chap i'm using it for whatever is at the lowest rate, then use it in something which demands the higher rate?
That doesn't sound right....

If it's for heating the rate is lower. When I buy diesel at a marina (inland not coastal if that makes any difference), as far as I know it's the same stuff as road diesel, but then they will ask 'What split do you want?' And you have to sign a bit of paper.

Despite that, it's still more expensive than road diesel, probably because marinas can't buy in bulk like garages.

[Evoluzione]

Simpo Two said:

Evoluzione said:

So what you are saying is that there are varying rates of taxation of red dependent on end use?
So I go along, tell the chap i'm using it for whatever is at the lowest rate, then use it in something which demands the higher rate?
That doesn't sound right....

If it's for heating the rate is lower. When I buy diesel at a marina (inland not coastal if that makes any difference), as far as I know it's the same stuff as road diesel, but then they will ask 'What split do you want?' And you have to sign a bit of paper.

Despite that, it's still more expensive than road diesel, probably because marinas can't buy in bulk like garages.

Household heating fuel is different stuff, it's 'white' and is different to road diesel.
This signing of a bit of paper is pretty useless too.....

[Hard-Drive]

Evoluzione said:

So what you are saying is that there are varying rates of taxation of red dependent on end use?
So I go along, tell the chap i'm using it for whatever is at the lowest rate, then use it in something which demands the higher rate?
That doesn't sound right....

In essence, yes. But it works both ways, you could be a marina liveaboard going nowhere for the winter, and even though both your engine and your heater share the same diesel tank, you'd still only be able to buy it at a 60/40 split.

It's not a "fiddle" or anything dodgy, it's just the way things are and all above board. I suppose if you physically don't have a diesel heater installed you may be on thinner ice, however if you are heating your water from the engine and own a hot water bottle, you're probably OK anyway!

Seriously, HMRC have bigger things to worry about than slightly to wrong rate of duty paid on 60 litres of diesel in someone's boat...

[Simpo Two]

Evoluzione said:

Household heating fuel is different stuff, it's 'white' and is different to road diesel.
This signing of a bit of paper is pretty useless too.....

You may be right on both counts, but as the owner of a diesel-engined boat I can tell you that's the way it is.

The bit of paper is probably useful to the marina as supporting data for their VAT return.

[24lemons]

Simpo Two said:

Evoluzione said:

Household heating fuel is different stuff, it's 'white' and is different to road diesel.
This signing of a bit of paper is pretty useless too.....

You may be right on both counts, but as the owner of a diesel-engined boat I can tell you that's the way it is.

The bit of paper is probably useful to the marina as supporting data for their VAT return.

The marina I worked in had to do a monthly return to HMRC declaring how much fuel had been sold for domestic/propulsion. The slips were heat and every once in a while we were asked to send them off for inspection. I then moved to another marina who simply incorporated the 60:40 split into the price and that was that, no paperwork or anything!

[OutInTheShed]

Yes, it's a complex joke.
If you should take your boat to euroland, you can be fined a lot of money for having the 'red' dye in your tank.

My boat does not get through huge amounts of diesel. It's a small yacht with a 20HP inboard. And a blown air heater.
I run it on white bought from the forecourt.

There are issues with storing diesel for long periods due to bio content and 'diesel bug', so this time of year I put some of the boat's store of diesel in the car.

[Evoluzione]

It is a joke, everyone is going to buy at the cheapest rate as it can't be proven otherwise.
I get my red from a marina, I've never been asked for ID, have only been asked to fill in a form once (and I could have written anything on it) and have no idea what rate he's selling it at.
So basically I need to tell him it's for heating, at what rate is that?

According to this by HMRC:
https://www.gov.uk/government/publications/reform-...

Gas oil (diesel, red) 'Used in an excepted vehicle, machine or appliance, other than for heating' is the same rate as 'Used in an excepted heating machine'. Both being 11.14p.

[Simpo Two]

Evoluzione said:

It is a joke, everyone is going to buy at the cheapest rate as it can't be proven otherwise.
I get my red from a marina, I've never been asked for ID, have only been asked to fill in a form once (and I could have written anything on it) and have no idea what rate he's selling it at.
So basically I need to tell him it's for heating, at what rate is that?

According to this by HMRC:
https://www.gov.uk/government/publications/reform-...

Gas oil (diesel, red) 'Used in an excepted vehicle, machine or appliance, other than for heating' is the same rate as 'Used in an excepted heating machine'. Both being 11.14p.

Why not present the HMRC info to your marina and ask them what their rates are?

I don't bother; you can hardly say 'That's a bit pricey' and take a 4-hour trip to the next marina to save £1. Just buy the stuff and try not to think too hard

[Jaguar steve]

OutInTheShed said:

Yes, it's a complex joke.
If you should take your boat to euroland, you can be fined a lot of money for having the 'red' dye in your tank.

Apparently you're OK provided it's in your main tank rather than spare cans in the locker and you've got some receipts showing VAT has been paid on it.

I don't know if there's any shore side fuel berths in the UK selling white diesel and if that's the case filling a bigger boat up with white from dozens of cans off a forecourt if you're going abroad would probably start getting a bit silly.

And even if you do use white diesel traces of red die can stay in the fuel system for some while after your last tankful of it.

[pequod]

Jaguar steve said:

OutInTheShed said:

Yes, it's a complex joke.
If you should take your boat to euroland, you can be fined a lot of money for having the 'red' dye in your tank.

Apparently you're OK provided it's in your main tank rather than spare cans in the locker and you've got some receipts showing VAT has been paid on it.

I don't know if there's any shore side fuel berths in the UK selling white diesel and if that's the case filling a bigger boat up with white from dozens of cans off a forecourt if you're going abroad would probably start getting a bit silly.

And even if you do use white diesel traces of red die can stay in the fuel system for some while after your last tankful of it.

As you say, the issue is with spare cans rather than what's in the main tank as we don't have 'white' diesel sold at fuel berths on the coast, so have little choice.

I have checked with my marina today about the issue of supplying fuel for a 'declared' domestic use only (no propulsion), and they have no problem as it is the boat owner who is making the HMRC declaration by signing the fuel receipt which they forward to the Excise boys, and it will be you on the hook if HMRC wish to check. Probably would get away with, say, 100ltr to last a year, but I reckon HMRC will come aboard if you are running through that amount or more, for a day trip and are topping 1000ltr plus per year?

Want to risk a fine and the possible loss of your boat?? Your decision...

[Jaguar steve]

pequod said:

I have checked with my marina today about the issue of supplying fuel for a 'declared' domestic use only (no propulsion), and they have no problem as it is the boat owner who is making the HMRC declaration by signing the fuel receipt which they forward to the Excise boys, and it will be you on the hook if HMRC wish to check. Probably would get away with, say, 100ltr to last a year, but I reckon HMRC will come aboard if you are running through that amount or more, for a day trip and are topping 1000ltr plus per year?

Mine pre-empts any personal declaration by stating they tax fuel on a basis of a 40/60 split between heating and propulsion.

If you don't have diesel heating and unless you 'fess up when you go to the office to pay then by default you're not paying the correct amount of tax on 40% of every litre you buy, but in my case and given a 25l tank will last me several weeks I'm rather hopeful HMRC's operatives might have better things to do than turn up mob handed for a nose round my bilges.

As an aside to all this malarkey my son pays £1.44 a litre for red diesel for his narrowboat but my marina charges £1.79 for exactly the same fuel.

[mcdjl]

It's for the duty rather than Vat. But yes heating use is duty free. That said it took over a year of asking for HMRC to send us a duty return last year and this year they reverted to sending it to someone who hasn't dealt with it over over 5 years so don't expect them to check any boats! Mind you we only sell about 2000l per year so hardly big!

[pequod]

Jaguar steve said:

Mine pre-empts any personal declaration by stating they tax fuel on a basis of a 40/60 split between heating and propulsion.

If you don't have diesel heating and unless you 'fess up when you go to the office to pay then by default you're not paying the correct amount of tax on 40% of every litre you buy, but in my case and given a 25l tank will last me several weeks I'm rather hopeful HMRC's operatives might have better things to do than turn up mob handed for a nose round my bilges.

As an aside to all this malarkey my son pays £1.44 a litre for red diesel for his narrowboat but my marina charges £1.79 for exactly the same fuel.

Yep, a 60/40 split is the norm unless you declare your boat is commercial or it's only for domestic use (liveaboards?). My marina has quite a few commercial vessels refuelling including fishing boats and a Border Force cutter, as we have a high speed pump as well as the normal 'forecourt' type of pump both delivering 'red' from the same tank.

Interesting you should mention cost of diesel supplied on the canals. I had a quick google and found an amazing disparity in costs up and down the cut some of which, are equivalent to, or more expensive than, my marina charges!

http://diesel.afmm.org.uk/

[Simpo Two]

pequod said:

Interesting you should mention cost of diesel supplied on the canals. I had a quick google and found an amazing disparity in costs up and down the cut some of which, are equivalent to, or more expensive than, my marina charges!

http://diesel.afmm.org.uk/

But see the dates - some of those prices are many years old.

[pequod]

Simpo Two said:

pequod said:

Interesting you should mention cost of diesel supplied on the canals. I had a quick google and found an amazing disparity in costs up and down the cut some of which, are equivalent to, or more expensive than, my marina charges!

http://diesel.afmm.org.uk/

But see the dates - some of those prices are many years old.

Indeed, I should have been clearer as I was comparing only the highlighted ones from 2022.