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HMRC internal manual

Hydrocarbon Oils Strategy

From
HM Revenue & Customs
Updated
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Introduction: fuel used in private pleasure craft and for private pleasure-flying

The UK held derogations from the Energy Products Directive (EPD) (2003/96) which permitted the use of reduced rates of excise duty on fuel used in private pleasure craft and for private pleasure-flying. These expired on 31 December 2006, and changes were introduced with effect from 1 November 2008 to comply with the European legislation.

Pleasure craft

From 1 November 2008, fuel used for propelling private pleasure craft has no longer benefited from the reduced rate of duty. Red diesel cannot be used for propelling private pleasure craft, unless the purchaser of the fuel makes a declaration of that intent, and the full rate of duty is paid. Red diesel at the rebated rate of duty may continue to be used for domestic purposes, such as heating and lighting. Purchasers must declare the amount of fuel to be used for propulsion, not just for domestic purposes, at the time of supply.

RDCOs who make supplies of red diesel to owners of private pleasure craft are required to register with HMRC and are responsible for retaining declarations made by the customers, and for accounting for the additional duty.

Private pleasure flying

From 1 November 2008, the purchaser of AVTUR is required to declare to their supplier whether or not the fuel purchased is for private pleasure-flying over the UK. If it is then they have a legal obligation to pay the duty due on the fuel to HMRC.

RDCOs who make supplies of Avtur for private pleasure-flying are required to draw the attention of the purchaser to the requirement to pay duty to HMRC and to retain purchasers’ declarations.

More information is available in public notice PN554 Fuel used in private pleasure craft and for private pleasure-flying