The Government has this week published a consultation on red diesel which holds out hope for boaters and the marine industry by potentially allowing red diesel to continue to be sold, although at a higher rate of duty, saving the significant cost of changing fuel infrastructure and tanks onboard boats.

HM Revenue and Customs have opened their consultation, Energy Products Directive – expiry of the derogation for private pleasure boats, on the new regime set to replace the current ‘reduced rate of duty’ marine diesel used by pleasure craft.

Following extensive representations by the British Marine Federation and the RYA, along with the Inland Waterways Association and the Federation of Petroleum Supplies, the Government has indicated that its preferred option is to continue to allow leisure boat users to use red diesel while paying the full rate of duty. This would mean that suppliers could continue to use the current infrastructure and users would not have to change or add tanks on their boats. The added costs of providing new equipment threatened the profitability of fuel providers and would dramatically reduce the availability of fuel to leisure boaters.

The consultation, which also includes other options currently not preferred by the Government, is open to all members of the public and will run until 31 October 2007. The easiest way to read and respond to the consultation is online at www.hmrc.gov.uk/consultations.

When the changes to fuel duty for private pleasure boats were announced by the Chancellor of the Exchequer in November 2007 Ministers said that they would look for ways of implementing the new regime which would both minimise the impact, and ensure that any additional compliance burden was as small as possible.

Neil Northmore, RYA Government Affairs Adviser, said: “The options laid out in the consultation paper certainly do seem to focus on minimising the impact. We are pleased that both recreational boater’s concerns and those of the marine industry have been heard and incorporated. It is evident that HMRC have worked hard to develop options that could work for all concerned”.