As the new sailing season approaches, yachtsmen in the UK are looking at a last summer of low-cost red diesel after the Government announced its intention to enforce the full rate of duty for heavy oil. As of 1 November 2008, the price of Diesel sold for propulsion is expected to rise to up to around £1.20 per litre.

Under the new scheme, HM Revenue and Customs envisage that boaters will ‘self declare’ whether they are a commercial or recreational vessel and recreational vessels will pay the full duty rate. Fuel used for heating purposes on board will continue to be sold at the rebated rate of duty and the retailer will take the owners word, again based on self declaration, on what proportion is for heating or lighting and what is for propulsion.

Howard Pridding, Executive Director of the British Marine Federation, said:
‘While no-one is going to pretend that the duty increase on red diesel is a good thing, we are pleased with how HMRC has managed the consultation process and the position that they have finally adopted.’