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BMF Meets With HMRC To Discuss Ending Of Red Diesel Derogation

by Jason Gorringe, Tax-News.com, London

20 December 2006


The British Marine Federation (BMF) has announced that it has met with senior HM Revenue and Customs (HMRC) officials to discuss the announcement, made earlier this month, that the EC will not renew the Red Diesel derogation.

According to the BMF, the key points arising out of the meeting were that the decision from Europe is final and there is no appeals process, and that the UK Government now has to implement that decision into national law in a timescale that is acceptable to the Commission.

It explained that:

"Our officials (and the Minister) seem genuinely disappointed that they have not been able to retain the derogation."

"The UK case to the Commission was heavily based on the economic impact on the industry. Our Government will now be taking their time to get implementation right."

The process to implement the legislation will require an announcement in a budget statement in Parliament followed by a Finance Act, and possible secondary legislation. Prior to that there will need to be consultation with all interested parties.

When the law is finally enacted in the UK, companies will not be able to sell red diesel to leisure users (the benefit to commercially operated craft will remain). This will require companies to put in the infrastructure to stock and supply ultra low sulphur diesel (ULSD) - the same diesel sold on the high street.

Boat users will be able to continue to use lower duty red diesel until the law is implemented.


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