ABOUT ME

MY RESPONSE TO THE HMRC CONSULTATION ON THE NEW ARRANGEMENTS FOR TAXATION OF DIESEL FOR LEISURE BOATS

Dear sirs,

I wish to make representations concerning the consultation on The Energy Products Directive – expiry of the derogation for private pleasure boats- Consultation on the options for change.

I note that section 1.4 of your consultation document says that "Private pleasure craft will continue to be able to use red diesel legitimately for purposes other than propulsion", which I regard as good news.

But your section 2.8 says "However because space is at a premium on boats, they normally contain only one tank from which fuel is drawn for both propulsion and domestic purposes. In order to continue to use rebated fuel for domestic purposes it will be necessary for boat owners to quantify and separate this from the fuel used for propulsion, and this may require the installation of a second tank. The cost of fitting a second tank, where space is available, would vary depending on the size and type of boat; however, estimates of about £750 have been quoted for a typical inland cruiser". That gives me a lot of concern, as I don't see how it can apply to my personal circumstances.

Even if it were practical for us to retro-fit a second fuel tank (which would be extremely difficult in a boat that was designed to make the optimum use of the available space), that would not facilitate the separation of the fuel used for propulsion of the boat for that used for other purposes, since in our case a single engine provides both uses of fuel.

Our boat and our cruising pattern

My wife and I live on a narrow boat , Felis Catus III, which combines residential and cruising roles. We are registered with British Waterways as continuous cruisers, although our cruising tends to be seasonal. We have only lived on the boat for less that two years. In our first winter (2005-6) we moved around a little, and last winter (2006/7) we rented a winter mooring for four months. In the spring,summer and autumn we tend to cruise for a few days at a time and stop on visitor moorings for a few days at a time.

Our engine serves us in several capacities as well as propelling the boat when cruising. We have a mixed 12v/230v electrical system which is powered as follows :

• The 12v side is powered by batteries charged from the alternator on the main engine, or from a charger on the rare occasions when we are connected to a shore electrical supply.
• The 230v volt supply can be powered from any of three sources (a) an inverter driven off the 12v batteries, (b) a separate 230v generator on the main engine or (c) a shore power supply.

This means that, apart for the few days per year when we have access to a shore power supply, our electricity supply comes from the same engine as propels us when cruising.

Our cabin heating comes mainly from a solid fuel stove, with some back-up from an Eberspacher diesel-fuelled heater which we don't use very often.

Our hot water supply comes from either of two sources : (a) when we are connected to a shore power source, we use an immersion heater, and (b) at other times the water is heated by a calorifier making use of the waste heat from our engine. In nearly two years we have never yet had to run the engine simply to heat the water, as we find that the amount of engine running we need to provide electricity gives us as much hot water as we need.

When moored without a shore electrical supply, we need to run the engine for several hours a day to charge our batteries and heat our water. Over a year, this comes to considerably more engine hours than we use for cruising. And according to your section 1.4, we are entitled to pay for the fuel for that at the rebated tax rate.

Some figures

I keep a detailed log of our cruising and our engine use, and attach below an analysis of the latter for most of the time we have lived on the boat.

It has been easy to quantify our engine use when we have been moored. It has been harder to analyse quite how much fuel we use for propulsion, since when cruising our engine simultaneously provides motive power, electricity and hot water. I have attempted to do this as follows :

1. For each quarter I have worked out the daily average number of engine hours on cruising days. (Some of the cruising days in the winter have been for very short trips - less than an hour - to go to a nearby boatyard to use its services).
2. Also for each quarter I have calculated the daily average number of engine hours on days when we have been moored without a shore power supply.
3. I have taken the difference between these figures as an estimate of the power we have used for actual propulsion, then grossed up that daily average by the number of cruising days in the period, and multiplied by our fuel consumption of 1.16 litres/hour as an estimate of the amount of fuel used for actual propulsion.

It is no surprise that the proportion of the fuel we buy which is used for propulsion varies seasonally. You will see that over the 20+ months involved, this works out at an average of 11% of our total fuel use.

I don't claim that we are in any way typical of any category of boaters. We know continuous cruisers who cruise more than us, and some who cruise less. But I very much hope that the new system will allow us to pay the increased tax levels only on the fuel we actually use for propulsion.

Response to questions in your consultation document

We buy our fuel from boatyards and from trading boats. We would not wish the new system to make it harder for those to maintain their supplies.

I note that the IWA proposes that cruising boats should be entitled to an automatic 25% allowance of rebated fuel. That may well be an appropriate figure for non-residential cruising boats, but our figures show that it falls a long way short of the reality for (at least some) continuous cruisers.

Your document says that you do not consider it viable to introduce a scheme by which boaters buy their diesel at the rebated rate and are responsible to the Revenue for the tax on that part of their usage which is used for propulsion.

Given that you are looking for a scheme whose operational cost is not out of proportion to the overall amount of revenue involved, I suggest that the best option may be to allow all genuine residential boats to buy all their fuel at the rebated rate, as would, in any case, be an entitlement for static residential boats.

FUEL USE ANALYSIS FOR NARROWBOAT FELIS CATUS III