Marine: Claiming back fuel excise duty

From business to business this VAT reclaim is not as commonly known about and implemented as you might expect. For business owners within the marine and maritime sector it is worth being aware of VAT Notice 263 which enables you to claim back the excise duty on fuel used in vessels making marine voyages, if it has been charged on to you.

Currently with excise duty rates at 67p per litre for light fuel and 11p per litre for heavy fuel, it is worth understanding whether, as a small business, you are able to claim this VAT cost back. The definition for an eligible claim is one where the fuel is used for commercial, not pleasure, purposes on a marine voyage. A marine voyage is one in which you are at all times, either within the limits of a port or at sea. It does not include inland waterways.

Some examples of eligible vessels aside from the obvious ferries, cargo vessels and hovercrafts are as follows, but even if your vessel is not listed below or on HMRC’s website, you may still qualify for the relief:

  • dive boats
  • fishing boats
  • tugs, tenders and other similar vessels
  • vessels undergoing trials
  • certain safety/ rescue vessels
  • some hired out pleasure crafts (if that is your business)

If you have missed out on claiming your excise duty in the past, it is possible to go back three years, with assistance from your marine specialist accountant. HMRC will accept claims for £250 or more and it can be done simply with their online forms.

We have seen historical claims averaging much more than £250 and so makes it worthwhile for businesses to take the time to check whether they are eligible for a refund.

Recent Case Studies