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UK Seeks To Retain Derogation On Red Diesel

by Jason Gorringe, Tax-News.com, London

18 October 2006


Financial Secretary to the UK Treasury, John Healey announced on Tuesday that the UK has submitted its application to the European Commission to retain a derogation that allows for the use of 'red diesel' in private pleasure craft.

This derogation allows the UK to charge a reduced rate of fuel duty for 'red diesel'.

The UK has also submitted two further applications to the European Commission, to continue derogations for fuel used in private air navigation and for waste oil reused as fuel. These derogations allow the UK to charge a lower rate of duty for the former fuel type, and no duty for waste oils.

Mr Healey stated:

"We have now submitted our application to the Commission to maintain the derogation allowing the use of 'red diesel' in private pleasure boats. We believe that removing this derogation would provide no significant revenue or environmental benefits to the UK, would undermine other EU objectives and could pose significant compliance costs for business and fuel users."

"In putting together our applications we have benefited from a great deal of helpful co-operation and advice from UK boating organisations, whom I would like to thank for helping us prepare the strongest possible application. The ball is now in the Commission's court."

"In the meantime, we will take every opportunity to restate our case to the Commission and to impress upon it the importance of this issue for the UK."


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