Chancellor’s Budget delivers success on the continued use of red diesel and provides further COVID-19 support for businesses

Published on: 04 March 2021

Speaking in the House of Commons he pledged to do 'whatever it takes' to support businesses and individuals throughout the pandemic. British Marine released a statement yesterday in response to the Budget which can be read here.
One key announcement in the Budget was the decision to allow the continued use of red diesel by commercial boat operators and private pleasure craft users in Great Britain.
This represents an overarching success for British Marine and the leisure marine sector which had lobbied to retain their entitlement to use the marked fuel.
The full summary of responses from the red diesel announcement can be found here, however the specific detail relating to commercial craft and private pleasure craft is as follows from Chapter 4. The Government's response says:

'4.6 Following consultation, the government has decided to maintain the entitlement to use red diesel beyond April 2022 for all commercial boat operating industries, including but not limited to the fishing and inland water freight industries.
4.7 The government has therefore decided not to change the treatment of private pleasure craft in Great Britain, where they will continue to be able to use red diesel and pay their fuel supplier the difference between the red diesel rate and the white diesel rate on the proportion they intend to use for propulsion.
4.8 In Northern Ireland, private pleasure craft users will no longer be able to use red diesel for propelling their craft. This will achieve consistency with the 2018 judgment by the Court of Justice of the European Union (CJEU) and ensure the UK meets its international obligations under the Northern Ireland Protocol of the Withdrawal Agreement. It will also align with fuel used by private pleasure craft in the Republic of Ireland, which should make it simpler for private pleasure craft users to access the fuel they need if they sail between Northern Ireland and the Republic of Ireland (and vice versa).'
The summary of responses also confirms that government will not remove the entitlement to use red diesel from April 2022 for the following uses (originally announced at Budget 2020):

• In agriculture, forestry, horticulture and fish farming. This includes agricultural vehicles used for cutting verges and hedges, snow and flooding clearance and gritting roads.
• For non-commercial heating.

In addition, following consultation, the government has decided to grant further entitlement to use red diesel for non-commercial power generation.
Beyond the red diesel announcement, the Chancellor also outlined a comprehensive support package for businesses impacted by COVID-19.
Some of the policies which were announced include:

• An extension to the furlough scheme - until the end of September 2021
• Extension of the Self-Employed Income Support Scheme - until the end of September 2021
• £5bn in new grants to support businesses impacted by the pandemic; this includes cash grants of up £18,000 for retail, leisure and hospitality businesses in England
• More loans to businesses in need of financial support - with loans of between £25,000 and £10 million being made available to help businesses all of sizes
• Extending the VAT cut to 5% for hospitality, accommodation and attractions across the UK until the end of September; followed by a 12.5% rate for a further six months until 31 March 2022.
• For business in the retail, leisure and hospitality sector an extension to the business rates holiday - with this now set to end in June
• A further extension of the apprenticeship hiring incentive in England to September 2021 - and in increase in payment of 3,000 for an apprentice
• A £7 million 'flexi-job' apprenticeship programme in England which will enable apprentices to work with a number of employers in one sector.

For full details of the Budget, please click here.