8 August 2007
Towards the end of last year there was an outctry from the GA community when it seemed that <a href=’http://flyer.co.uk/news/newsfeed.php?artnum=388′ target=’_blank’>European rules would mean a huge hike in Avgas prices</a>. The situation was that due to lobbying in the 1980s, Avgas had been (and is) taxed at half the rate of road petrol. This was enshrined in UK law. However, this had become illegal under European law, and although the UK had been operating under a ‘derogation’, this derogation lapsed in December 2006 and the EC refused to renew it.
The feeling at the time was that the UK government was bound to raise Avgas duty, overnight, to be on a par with road fuel.
However, when (as chancellor) Gordon Brown addressed the subject in his budget earlier this year, he revealed that any changes would be deferred until November 2008 and that there would be a consultation process before that.
The consultation has now begun with a document from HM Revenue and Customs entitled ‘Energy Products Directive – expiry of the derogation for private pleasure flying’.
The consultation covers several areas, including the proposed schemes for collecting duty on aviation fuels (avgas and avtur) – and since one proposal is that avtur should be taxed for private flying only, there’s also a proposed definition of private flying.
The proposition for avgas is that as of November 2008 it would be charged at the minimum European rate, which is little more than the current rate of 28.84ppl.
The big change would come with reference to avtur (diesel). At the moment, avtur attracts no duty (it’s one reason diesel is so cheap). However, the proposal is that duty should be paid on private pleasure flying. This means that the new price would not be charged at the pumps, but pilots/operators would be responsible for declaring their private usage (and fuel ‘dealers’ would be required to remind pilots of this). The rate for this fuel would be 54.68ppl.
Of course, with this there would have to be a definition of private flying, which is also included in the proposals. Among other things, it exempts (as NOT being private flying) commercial flights, non-commercial flights in a company aircraft (with a professional pilot) and non-commercial flights in association with the conduct of business.
Other specific exemptions include air taxis, emergency service flights, training (whether the student is accompanied or not), mail and freight services, agricultural, aerial survey/photography and so on.
Flying to and from your place of work is specifically not included.
There are a number of items which are not mentioned: we noted glider tugging and competition/airshow flying among them.
The consultation document is available for download as a pdf from <a href=’http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageLibrary_ConsultationDocuments&propertyType=document&columns=1&id=HMCE_PROD1_027787′ target=’_blank’>the HMRC website</a>. Replies must be made before 31 October 2007.
