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  1. #1
    Join Date
    Aug 2001
    Location
    Brecon, Wales
    Posts
    7,165

    Default Commercial Use of Red Diesel - an absurdity

    It seems that the use of red for commercial users is not under threat - many large boats are coded and available for charter - so lets take such a boat with say 20% private use and 80% charter use - what fuel pump would be used if red is stopped for pleasure boaters but not for commercial users?

    Is it not absurd that a rib taking say 14 passengers around the coast on pleasure trips is commercial hence can use red - a charter boat taking executives for a ride is commercial and can use red but the same boat being used for your own pleasure would not be able to use red? What do you do - suck the red out and replace with white diesel?

    Even a narrow definition of commercial as just say 'fishing' can be difficult - a charter boat that allows some fishing is surely a fishing boat? A boat taking out 6 anglers pleasure fishing for the day would surely be commercial.

    So has anyone any idea how red will be protected for 'commercial vessels' - in other words what is a commercial vessel? How will those who dispense the fuel know what is commercial and what is not?

    It seems totally absurd to claim that the rich have been hit when in practice an 80 foot charter boat at £7k per day uses red whilst a 25 foot power boat is banned from using it.
    Paul
    St Francis 50 Cat
    My Multihull Forum

  2. #2
    Join Date
    Apr 2005
    Location
    Looking out of the window
    Posts
    13,939

    Default Re: Commercial Use of Red Diesel - an absurdity

    Iwould imagine that all vessels would use white diesel, regardless of their activity. The 'over tax' paid on the white diesel would then be claimed back through operating taxes.

    I.e. a fishing vessel that is 100% commercial can claim the appropriate tax relief on 100% of diesel used. Your example of a large MoBo which is used for charter work 80% of the time can only claim relief on 80% of fuel used in the year.

    Either that, or a direct % against profits made from the commercial activity. In a way, this make more sense, as if the Red is not available anywhere, it cannot be used for other vehicles such as cars and vans.

  3. #3
    Join Date
    Sep 2005
    Location
    Petworth, West Sussex
    Posts
    35

    Default Re: Commercial Use of Red Diesel - an absurdity

    If that were to come in into effect, then one can envisage a loophole being created.

    Something on the lines of, you would charter your boat from a company you are a director of, or set it up in a pension fund if next years rules allow it. You would pay the comapny to hire the boat at a nominal fee, the company includes fuel in its price and thus, they claim back the refund. Messy but possibly worth a bit more thought.

  4. #4
    Join Date
    Aug 2001
    Location
    Brecon, Wales
    Posts
    7,165

    Default Re: Commercial Use of Red Diesel - an absurdity

    Jezbanks - that gets round the mwthod of collection - a claim back system. That would draw a lot more capital out of the supplier and the customer - in effect depositing a sum with the government but it could be made to work. In fact commercial boats now can claim back their petrol duty as well as the vat - even on red today.

    However, it still means that you have tha abusdity of a charter boat going out on its executive entertainment trip on the equivalent of red, as is the small fishing boat taking out 6 anglers but the same boats being used to do the same pleasure things for yourself would be taxed to the hilt. Many large boats are coded charter boats. So pleasure for yourself is taxed the same pleasure that you hire is not taxed! That is absurd.
    Paul
    St Francis 50 Cat
    My Multihull Forum

  5. #5
    Join Date
    Apr 2005
    Location
    Looking out of the window
    Posts
    13,939

    Default Re: Commercial Use of Red Diesel - an absurdity

    I completely agree with you, an trust me , I am nor a supporter or an implementer of this way of thinking - I meerly think it is a solution the government may have considered and it gets around the arguement originally posted in this thread.

    On the second point, when have you ever known our government to be logical or fair - especially highwayman Brown?

  6. #6
    Join Date
    Aug 2001
    Location
    Brecon, Wales
    Posts
    7,165

    Default Re: Commercial Use of Red Diesel - an absurdity

    No - I have never known logic to get in the way of using their powers to mess up an industry .... none of them, it seems, have ever had to run a business ... they seem to be dedicated politicians from university who can tell us how to run the world having never experienced it themselves.

    I wish I did not agree with you but I do.


    I think that the worst will happen on this issue - I do not think they have done other than pay lip service to the trade/consumer lobbying - after all it is now September and still no application for an extension .......
    Paul
    St Francis 50 Cat
    My Multihull Forum

  7. #7
    Join Date
    Jun 2004
    Location
    Hampshire
    Posts
    349

    Default Re: Commercial Use of Red Diesel - an absurdity

    Surely you are mixing up 2 different issues.

    1) Derrogation of tax. Let it go, it means nothing at todays oil prices. What full harmonisation will require is that you cant sell fuel below the harmonised price accross the EU. I can't remember the exact number but its 20 something pence (23.2??) per litre. I don't believe any of us will worry if we have to pay say 30 pence / litre.

    2) Road Tax DERV, this is where we should be fighting, tax marine fuel yes but not a road prices as the surface of the sea doesn't need retarmacing every few years.

    So we can loose the derrogation and still pay say 30p per litre if the tax regime is sensible.
    Scaramoosh, Scaramoosh successor to Phandango (with apologies to Queen)

  8. #8
    Join Date
    May 2001
    Posts
    529

    Default Re: Commercial Use of Red Diesel - an absurdity

    I think it very likely that the government will want to abolish all forms of low tax gasoil ASAP. They continually bleat on about losing billions in revenue from crooks using heating oil and red diesel in garages.

    I expect they will bring in a massively complicated system that will allow commercial users to claw back the duty and ensure that another 10,000 people join the Government payroll.

    At this rate 75% of the country will "work" for the government (including pensioners, invalids, unemployed as well as civil servants) and the other 25% will be paying tax at 80% to fund them.

  9. #9
    Join Date
    Dec 2002
    Location
    Warwick. Boat in Swansea
    Posts
    1,362

    Default Re: Commercial Use of Red Diesel - an absurdity

    The whole thing is a real mess and if the government has any sense they will leave well alone.
    Take the issue of heating fuel used in your average eberspacher/webasto...
    If red diesel is abolished for marine use, then what about heating issues...you can legally use red at home for your oil fired heating, so why penalise the average boatowner/livaboard...it's domestic fuel.
    I doubt whether fitting separate tanks is viable in the majority of boats, but hey if you did, how would they know which fuel was being used for main engines.
    So the government would have to abolish domestic heating oil entirely for any ban on marine diesel to be effective.

    Another issue is that of older marine engines such as the Perkins amongst others.
    These are specifically designed to run on red diesel or even heavier heating oil.
    They will not run well on modern Road diesel because it is thinner and has less lubricating properties. This is because they were originally designed as generating and agricultural engines, specificially to use heavier diesel oils.
    So every 50 hours or less I would have to be changing the lift pump and metering unit seals...not a job that can be done at sea in an emergency, so has significant safety aspects.
    Perkins would have, I understand, no plans to modify the seals for the older engines as the market is just not big enough...so we're stuck on that one, or we will be ..big time if mgo/red goes.

    Add these to the logistic and distribution issues, the absurdity of the commecial issues, which allow people to run leisure boats that are commercial in name only, and the grossly unfair situation that would bring about...then you have a recipe for
    a complete mess in the marine world.
    One thing is for sure...the fuel mustn't change. How they tax it is something else...but to change the fuel from red to derv would be a complete disaster.

    Steve.

  10. #10
    Join Date
    Sep 2003
    Location
    Thames
    Posts
    3,543

    Default Re: Commercial Use of Red Diesel - an absurdity

    So what have all the boat owners with Perkins engines in Holland and Germany been running on all these years? [img]/forums/images/graemlins/confused.gif[/img]

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