HMRC confirm 5% VAT freeze on UK marine Red Diesel for pleasure craft.
VAT
HMRC have confirmed that VAT will continue to be charged at 5% on red diesel fuel for propulsion and domestic use. Only weeks before the fuel duty derogation for red diesel ends for propulsion on leisure craft the HRMC have cleared up some potential confusion in the industry regarding the amount of VAT to be charged. Good news, the VAT level is to remian at 5%, i.e. not to be increased to 17.5%.
RED DIESEL FUEL DUTY
The expiry of the reduced rate of fuel duty is still going ahead and pleasure boat owners can expect an increase in fuel duty from the current 9.69 pence up to 50.35 pence from 1st November for all fuel declared for navigational(propulsion) purposes. Fuel duty for fuel declared for heating (domestic) purposes on both leisure and commercial boats remains unchanged at 9.69 pence.