Northern Ireland boaters likely to lose use of red diesel

Published: Wednesday, 17 March 2021

THE Union VAT and excise law that applies to Northern Ireland means that boaters are likely to loose the use of red diesel, thus having to pay the full duty for both propulsion and heating.

In an attempt to clarify the situation The Royal Yachting Association (RYA), together with British Marine and the Cruising Association met yesterday with representatives from HM Revenue and Customs and HM Treasury to discuss the difficulties for private pleasure craft in Northern Ireland resulting from the decision to withdraw the use of red diesel.

Need clarity

Recreational boaters and the marine industry urgently need clarity surrounding the government’s plans for implementation and how it intends to address the practical difficulties before June.

The discussions took place against the background of the Protocol on Ireland/Northern Ireland and in particular Article 8 concerning Union VAT and excise law that applies to Northern Ireland. To achieve consistency with the 2018 judgment by the Court of Justice of the European Union and to ensure that the UK meets its international obligations under the Protocol, private pleasure craft users in Northern Ireland will no longer be able to use red diesel for propelling their craft.

Have to use white diesel

It is proposed that this change will take effect by June this year. The RYA has stressed the difficulties presented by this short timescale and requested a longer period to address the white diesel supply issues that the decision presents. Once implemented, private pleasure craft users in Northern Ireland will have to use white diesel for propulsion instead of red diesel.

Private pleasure craft users in Northern Ireland with only one fuel tank on board for propulsion and non-propulsion will not have to pay a higher rate of duty on their non-propulsion use of diesel than they would otherwise have to pay, it being the result of a new relief scheme in Northern Ireland which will become effective from the date that users become obliged to use white diesel.

Cannot justify two pumps

The RYA is concerned that the volume of sales of diesel to private pleasure craft is not great enough for suppliers to justify the expense of providing a second pump at the waterside, which is going to cause significant supply problems.

Also it would mean an extra tank would have to be built into boats to separate the two fuels, with one for propulsion and the other for such as diesel supplying heaters.

HMRC have confirmed that once the change does take effect, it would be illegal to buy red diesel for private pleasure craft propulsion in Northern Ireland, but fuel already present in tanks could be used without penalty.