Buying Diesel

Make sure you are buying the correct fuel, at the correct price, supported by the correct paperwork.

Fuel supplies

Although fuel suppliers are not compelled to add FAME (bio diesel) to fuel that is being supplied for use by pleasure craft, as a result of the UK Renewable Transport Fuel Obligation (RTFO), it is highly likely that fuel will contain FAME as it is a practical necessity for suppliers to meet their RTFO obligations.

All recreational boaters needs to be aware of the potential risks associated with the storage of fuel.

It is a legal requirement for inland waterways vessels and recreational craft that do not normally operate at sea to be supplied with low sulphur fuel.

Great Britain (GB)

Although entitlement to use red diesel and rebated biofuels is changing from April 2022, this does not alter the arrangements for pleasure craft in GB as ‘fuel for all marine craft’ remains a qualifying purpose and that includes propelling private pleasure craft in GB (but not in Northern Ireland.)

Red diesel continues to be available at the waterside in GB but recreational boaters must pay the full rate of duty when purchasing fuel for the purposes of propulsion.

Red diesel used for domestic purposes such as heating or electricity generation, may be purchased at the reduced rate of duty.

When recreational boaters buy diesel for their craft, they need to make a declaration to the supplier if they intend the fuel to be used for propelling a private pleasure craft. The recreational boater must also declare what percentage of the fuel will be used for propulsion (as opposed to domestic purposes such as heating or electricity generation).

There is no fixed allowance. It is for the purchaser to declare the percentage of fuel used for propulsion. However, analysis by both the industry and HMRC suggested that a split of 60% for propulsion and 40% for domestic use (heating, cooking etc) probably reflected many people’s use and it is therefore likely that many users will declare such an apportionment. This will make it easier for suppliers (RDCOs) to work out additional duty and VAT.

However, where a purchaser knows that their propulsion use may be more or less than the above apportionment split or a craft clearly has no domestic use, then they must declare their actual intended usage.

Residential boat owners whose primary residence is their boat will hold documentation, such as a Houseboat Licence, Residential Mooring Licence, Council Tax Bill in respect of the mooring, or other peripheral documentation, invoices or bills which provides proof of permanent residency. They may purchase all their fuel at the rebated rate. They will still be required to make and sign a declaration saying that 0% of the fuel is for propelling purposes. It is their responsibility, as the declarant, to ensure that they hold the requisite documentation should HMRC wish to check the validity of the declaration made in these circumstances. Continuous cruisers may not declare 0% under these arrangements, even if they reside permanently on their craft, they must declare their actual intended usage for propulsion.

Northern Ireland (NI)

In accordance with the UK government’s obligations under the Withdrawal Agreement the Court of Justice of the European Union (CJEU) ruling of 2018, that the UK’s taxation rules for diesel used in private pleasure craft contravened the Fuel Marker Directive has been implemented in NI.

Effective 1 October 2021 it is illegal to put rebated (red) diesel into the tank of a private pleasure craft in Northern Ireland that supplies the engine that propels the craft.

If a private pleasure craft in NI has separate tanks for propulsion and non-propulsion uses, then red diesel can still be purchased and used in the non-propulsion fuel tank.

Where a private pleasure craft does not have separate tanks a new Fuel Duty relief, the ‘Private Pleasure Craft (Northern Ireland) Relief’, allows fuel suppliers to offer a fixed point of sale discount on 40% of the fuel supplied i.e. 40% of the fuel is supplied at the rebated rate of duty applicable to non-propulsion purposes (heating and lighting, for example). You will be required to sign a declaration each time you buy discounted diesel.

Although users are not required to flush all residual traces of rebated diesel from the tank there is an expectation that users will run the fuel tank to as close to nil as is safe before refilling, to minimise the level of residual traces, as checks may be conducted by HMRC.

You may be asked provide evidence, such as receipts from purchases of fully duty paid oil, which demonstrates that you have been refilling with the correct fuel since the rules changed and the rebated diesel in the craft was put in before the rule change and is still being used up. Steps that have been taken to run down stocks and switch to using fully duty paid diesel will be taken into account.

The sanctions, if HMRC believes that a private pleasure craft user has deliberately or recklessly put rebated diesel into the craft after the rules changed, are set out in Section 6 of Excise Notice 75.

Moving between NI and GB

If a boat based in NI visits GB rebated (red) diesel can be purchased when in GB in accordance with the rules in force in GB.

When returning to NI from GB or if you are visiting NI from GB you should retain receipts to show that the fuel was purchased in GB, log engine hours and keep a record of the plan(s) for completed passages, in case you are asked to demonstrate why there is rebated (red) diesel in the tanks in NI.

Visiting other countries from NI

When visiting other countries you should re-fuel in accordance with the law in that jurisdiction including purchasing marked diesel where that is permitted. However it is again essential that you keep records, as detailed above, in case you are asked to evidence where the fuel was purchased.

Further information

Information for users and suppliers can be found on gov.uk at https://www.gov.uk/guidance/fuel-duty-changes-for-private-pleasure-craft-in-northern-ireland-that-use-diesel.

RYA work on this issue

Please visit the External Affairs page on the RYA website to find out more about the work the RYA has been doing to ensure the continued availability of fuel at the waterside in the UK.

Engine Checks & Preventing Fuel Contamination
Red diesel abroad