If Irish boat owners were smart they would buy a small quantity of green diesel, pay the duty and claim that was all they needed for the season. Then again, as you say, maybe for many the problem is explaining away the boat, not the low fuel usage…..

Now, we seem to be agreed on what the ultimate solution should be: auto diesel for everyone, rebates for those who need it. I have, as I said, some information to suggest that some hire firms would be quite happy to change over and that they think the current system is ridiculous. I found, incidentally, that there is already a rebate system for certain trips by certain coach operators, although I haven’t kept the link to the document on the Revenue site.

A lot of your message seems to be about three points: the extent of non-compliance, the reasons for such non-compliance and the self-esteem of boat-owners.

You say that the numbers of Shannon-registered boats cannot be relied upon. I agree, and indeed have made the same point in my article for the forthcoming issue of Afloat. However, I use the numbers only to give an indication of the orders of magnitude by which the number of returns made differs from the number that should have been made; I’m not trying to provide exact figures (which would be impossible to do). If, say, five thousand returns had been made, I would be hesitant to claim vast underpayment because I could not say, with any great confidence, whether the number of diesel-powered boats was (say) greater or less than ten thousand. But when the number of returns is two orders of magnitude lower than the number of boats on the Shannon, in other words about 1% of what it should be for inland boats alone, then I think I am justified in claiming that the scale of underpayment is enormous.

You are wrong about what the Shannon lock passage figures show. I haven’t got complete historic figures, but here is what I have got.

Year, Total number of passages, Number of private boats (n/a means not available, ie I haven’t got the figure to hand)

1998, 74642, 16256
[...]
2002, 76962, n/a
2003, 76172, n/a
2004, 69610, n/a
2005, 68521, n/a
2006, 67366, 24634
2007, 66942, 24554
2008, 58787, 22628
2009, 53969, 24705
2010, 50706, 24395
2011, 45156, 21442

Note that the 2011 figures will be reflected in the Mineral Oil Tax returns being made by 1 March 2012; they are not relevant to the returns for 2009 and 2010. The pattern shown up to 2010 is quite clear: a huge fall in the numbers of passages, but that fall is concentrated amongst the hire boats: after an increase from 1998, the figures for passages by private boats are remarkably consistent from 2006 through 2010. So, sad though we might be to learn of the departure of many twin-screw cruisers, that has not affected the figures for the years I was writing about. And, again, I make the point about orders of magnitude: even the fall in the number of lock passages between 2010 and 2011 is not such as to support the contention that there are less than 40 private boat-owners left in the country.

Next to the reasons for non-compliance. I see that I myself wrote an article in Inland Waterways News in 2003 about the ending of the derogation and there were other mentions over the years. I understand that IWAI has many thousands of members, most of whom own boats, but the number of returns seems to be two orders of magnitude less than the number of IWAI members. I am conscious, too, that boat-owners tend to discuss boating matters, and I see that your website and forum have several mentions of the subject. I find it difficult to believe, therefore, that only about 35 private boat-owners (subtracting the IBRA hire fleets from the number of returns) were aware of the new rules.

But I’m not really interested in whether boat-owners don’t pay because they dislike paying tax, because they didn’t know they should do so or because the dog ate their Mineral Oil Tax return. I don’t think I mentioned motivation although, as an Economics graduate, my first assumption is that people will act in their own interests rather than in those of the state. So if you have a tax system in which enforcement is extremely unlikely, and compliance carries the risk that someone might ask how you afforded a large boat (or why a company ostensibly owns a large boat), a rational economic actor might opt to keep the money and ignore the tax. That’s why I think it’s a bad system and should be discarded: only auto (full price) diesel should be used.

You, not I, used the word “defraud”. I simply established, reported and commented on the fact: the vast majority of boat-owners are not paying the tax and that, to me, means that they are dodging paying the tax. You might, I suppose, complain that I should have used a different term, like “non-tax-compliant boat-owners”: it may be that their self-esteem is damaged, or their feelings are hurt, as a result of being called tax-dodgers. But I can’t see that you have any other legitimate grounds for complaint. If you can show that the level of non-compliance is lower than I think it is, I would welcome the information, but (if you’ll forgive my saying so) you haven’t done so so far. Let us, however, rejoice in the fact that improved compliance will allow us to help the state to recover from its present difficulties; paying more tax will become a cause of satisfaction for us all.

bjg

There is widespread ignorance of the new rules, is compounded by the fact that suppliers haven’t understood it either. No ones condones evasion, but to assume that the small number of returns is an indication that boaters are aware of the requirements and intentionally avoiding making returns is not justified either.

Removing access to green diesel would cause significant issues, not to mention a distinct possibility that some users would continue to fill with marked gas oil, given that tanks will be contaminated for years to come. Hire bases have little incentive to switch to auto diesel as the current system gives them a 12 month cash flow advantage. Equally stringent insurance and environmental rules mean that installing additional dual pumping arrangements would be prohibitively expensive. We are already in near monopolistic supply situations on the inland system , for example there is in effect one pump for the whole of lough Ree, from north of Banagher to Roosky. Forcing a switch to auto diesel without a taught through process would result in severe supply difficulties and encourage non legal solutions. There is also the huge issues around the coast away from major boating centres.

The solution is obvious , remove marked gas oil from the marketplace ( which would reduce smuggling ) and provide rebates to those that are entitled to them.

In the absence of such systems we have an somewhat imperfect system, which to the credit of Revenue implicitly acknowledges the difficulties of the situation.

I fully accept that significantly greater compliance is required ( and record keeping in general from all suppliers) and a large scale boater awareness scheme is neccessary. What I questioned is your assertion is that poor returns suggest an intention to not comply.

Furthermore using Shannon registration numbers as an indication of boat numbers is massively flawed. The system is well known to completely over state actual boats in service, ( and often used by tourist agencies to their benefit) given that boats go on to the register rarely are removed. Furthermore the vast majority of recent registrations ( in 2009, 2120) are from ancedotal evidence, petrol sports boats and smaller ribs, lake boats ( not to mention an inflow of jet skies from other banned areas) etc, the net population of medium to large cruisers has decreased significantly, due to enforced sales ( almost exclusively abroad) and repossessions. Very few of these are removed from the register. Any visit to typical large boat marinas will confirm such empty spaces. Furthermore there is significant anecdotal evidence that many boats are not being used or are engaging in small trips to reduce operating costs. This being particularly true of large twins.

A more accurate indication of actual usage and hence consumption of diesel would be to examine lock movements. These show a massive drop in activity on the Inland system, with private boat movements down to levels not seen for years. Hence it’s reasonable to assume that many boats are not purchasing diesel at all, as they aren’t really on the system anymore. Conversations with several fueling operators would suggest as much as well. The rapidly increasing cost of diesel, the poor fuel efficiencies of older boats and the state of the populations decline in wealth would suggest that this trend is set to accelerate.

As you point out the number of returns are low. But the reasons are many and jumping to conclusions that there is a widespread malicious intent to defraud Revenue, is in my opinion entirely unjustifed and as I said mischeavious. A more thoughtful and considered piece would have discussed the issue rationally, examined the problems and highlighted solutions, rather then leaping to “sound bite” style conclusions.

Dave