Boating is a very popular past time. Boats are often powered by diesel and is also used to heat water and heat the boat. The diesel used for heating is taxed at a different rate from the diesel used for propulsion. It is, of course, very difficult to work out how much diesel has been used for what purpose as it all comes out of the same tank.
Red diesel is used to identify the diesel that carries less tax. What is called a derogation was in place, prior to 2003, to allow pleasure boats to use Red diesel.
Before 2003, the RYA had successfully lobbied Government to seek the retention of the derogation but this was rejected by the European Commission in favour of its tax harmonisation agenda.
It seems the reason that things are so complicated and we all pay higher tax than we need to is as a result of the EC.
The BMF, RYA, IWA and HMRC were disappointed that the derogation was not renewed by the EC, despite what we all considered to be a very strong case. We also all agreed that the end of the derogation presented considerable difficulties in terms of implementation.
Putting to one side the rights and wrongs of red diesel being available to pleasure boats what on earth has this got to do with the unelected EC? Tax harmonisation, if necessary, should be a national issue not the business of the unelected EC.
Go away EU.