RYA advice on when taxation is likely to begin

On Thursday last week it was announced that UK leisure boaters were to lose their ability to use low-duty red diesel. The European Commission rejected an application to extend a derogation allowing use of the fuel. The current derogation runs out on 1 January 2007.

Neil Northmore, RYA Government Affairs Adviser reports:

‘We met with HM Revenue and Customs (HMRC) officials this week together with the British Marine Federation (BMF) to discuss the Commission’s decision and find out Government’s initial thoughts on timescales and process.

‘At this stage it is clear that the price will not go up on 1 January 2007. The reality is there will be a period of time in which boaters will continue to benefit from the low duty rate, and the earliest this can change is Summer 2007.

‘Changes can only be bought about through primary legislation i.e. the Finance Bill and it is highly unlikely that they will be in a position to do this in the next Finance Bill, which is due April 07.

‘To give a clear timescale is hard at this stage for Government as they are currently planning how to take matters forward. It is clear that further technical research into the implications of the change from low duty red diesel is required, and there must be implementation planning for the transitional period. It will also be ncessary for the Government to conduct a public consultation at some stage next year.

‘The RYA is urging Government not to rush the decision and to exercise all due diligence to ensure that new measures are reasonable.

‘Together with the BMF we are working closely with HMRC and will keep you updated on any developments.’

see www.rya.org.uk for the latest on the derogation issue.

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