Red Diesel Taxation – the Saga Continues

Red Diesel Taxation – the Saga Continues

24 October 2017

IWA continues to be concerned at the implications for boat owners and boatyard operators following confirmation that the European Commission still intends to take the UK Government to court over current UK laws which allow leisure boaters to purchase red diesel.

This is despite the agreement made with HMRC in 2008 whereby boaters can purchase red diesel for propulsion whilst paying the required standard rate of tax, with a form of self-declaration allowing a proportion of the diesel used for heating and lighting to be purchased at a lower rate of tax.  The European Commission referred the matter to the European Court of Justice in July 2014, stating that the UK was "not properly applying" European excise rules.

On 1st September 2017 the European Commission announced the case number against the United Kingdom for it taking action relating to Article 258 of the Treaty on the Functioning of the European Union, stating that it considers that, by allowing the use of marked fuel for the purposes of propelling private pleasure craft, the UK has failed to fulfil its obligations under Council Directive 95/60/EC of 27 November 1995 on fiscal marking of gas oils and kerosene.
Further background can be found in IWA’s Briefing Note on Red Diesel and also in IWA’s recent response to HM Treasury’s call for evidence on the use of red diesel.

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