22 March 2007
While most headlines no Chancellor Gordon Brown’s budget yesterday are concentrating on the 2 percent fall in the basic rate of income tax, the light aviation industry was more interested in what he might say about fuel prices.
And he did say something.
Late last year it emerged that Europe was expecting the UK to bring its <a href=”newsfeed.php?artnum=388″>fuel duties in line with the European minimum</a>. Any immediate effect (ie fuel price rise) to come from this was cancelled, for the meantime, by the fact that Avgas’ unusually low rate of taxation was enshrined in UK law, which would have to be changed to apply the standard European rate.
The Chancellor address this yesterday, saying that he was aiming to bring the changes into effect on 1 November 2008.
The <a href=’http://www.hm-treasury.gov.uk/media/757/0A/bud07_budgetnotes_381.pdf’ target=’_blank’>Budget Notes</a> (the following is on page 165 of the pdf document) say:
<blockquote>
<b>ENERGY PRODUCTS DIRECTIVE : EXPIRY OF
DEROGATIONS</b>
Who is likely to be affected?
1. Suppliers and users of fuel for private pleasure-flying and private pleasureboating.
Suppliers or users of waste oil as fuel, either directly after recovery or following a recycling process for waste oils.
General description of the measure
2. Following the expiry of the UK’s derogations from the Energy Products Directive on 31 December 2006, from 1 November 2008 fuel used for the purposes of private pleasure flying and private pleasure boating will no longer benefit from the current reduced and exempt rates of duty.
3. Informal discussions have already begun with representatives from the boating and aviation sectors on options for implementation. Formal consultation on new regimes will be held later in the year.
4. No decision on the renewal of the derogation concerning use of waste oil as fuel has been notified by the European Commission.
Operative date
5. The changes will take effect on and after 1 November 2008.
Current law and proposed revisions
6. The Hydrocarbon Oil Duties Act 1979 (HODA) will be amended by Finance Bill 2008 to take effect from 1 November 2008.
7. Statutory instruments will be made under the relevant sections of HODA.
Further advice
8. If you have any questions about this change, please contact the National Advice Service on 0845 010 9000. Information about Budget measures is available on the HM Revenue & Customs website at <a href=’http://www.hmrc.gov.uk’ target=’_blank’>www.hmrc.gov.uk</a></blockquote>
Elsewhere the chancellor said: “The Government will implement the changes required on 1 November 2008, after further consultation with industry about the best way to minimise the longer-term compliance burden on the sectors concerned.” – so we won’t stop campaigning, as there’s no question that it’s a burden.
Also in the Budget is the promise that all mogas will have 5 percent biofuels in it: “Our renewable transport fuel obligation means biofuels will, by 2010, account for 5 per cent of all fuel in road vehicles and by 2020 potentially 10 per cent.” An increasing number of aircraft are flying on petrol: how this will affect them remains to be seen.
