UK yacht fuel taxes anger European Commission

Luxury yacht owners in the UK may be forced to pay a higher price for fuel after complaints from the European Commission (EC) suggesting the oil for many pleasure boats are being taxed at a lower rate - intended only for fishing boats.

Under EU rules on fiscal marking for fuels, fuel that can benefit from a reduced tax rate has to be marked by coloured dye. Fishing vessels for example are allowed to benefit from fuel subject to a lower tax rate but private boats must use fuel subject to a standard rate.

Currently the UK law does not impose fuel distributors to have two separate fuel tanks, one with marked fuel subject to a lower tax rate and the other with regular fuel subject to a standard tax rate. As a consequence, private leisure boats can not only use fuel intended for fishing vessels but also risk heavy penalties if they travel to another Member State and the ship is controlled by the local authorities.

In the absence of a satisfactory response within two months, the EC may refer the UK to the EU's Court of Justice.

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