FullyFlapped
8th Dec 2006, 16:41
Just received this (lengthy, sorry) email from AOPA :-
Dear Member
We have another problem on which we seek your help. The text in this email has been developed jointly between AOPA and BBGA as we work together to try and do something about this very difficult problem.
The news that the EU Commission has rejected the UK’s application for the retention of the current Duty derogation on AVGAS and JET A1 is very disappointing.
The UK’s Application to the Commission, developed after discussions we held with the Treasury, stated the following:
The United Kingdom would like to apply exemption from excise duties to fuel used for the purpose of private pleasure flying. Private use of jet fuel would be fully exempted from duties and aviation gasoline would be taxable at a reduced rate of half the tax rate for leaded gasoline. The United Kingdom maintains that there are minimal benefits from the shift to the standard tax treatment in comparison to the costs and other consequences associated with the expiry of the derogation. Therefore the main objective of the measure is to avoid costs of transition. In particular, the United Kingdom highlights the compliance costs on suppliers of aviation fuels and on the industry and stress the administrative costs and enforcement difficulties for the administration associated with the expiry of the derogation. The United Kingdom further explains the negative effects on both the private pleasure-flying sector and many small businesses associated with it. Furthermore, it would increase the cost of training which would grow the trend for pilots to train in the United States. In addition, removing the derogation would raise safety issues if users were tempted to put unleaded petrol rather than aviation gasoline. On the other hand, the United Kingdom points out the insignificant revenue gain and the small benefit in terms of carbon emission saved associated with introduction of the general tax treatment
Although the derogation officially ends on 31 December nothing will happen for the moment. The government has to work out what measures are necessary, how to enforce them and in what timeframe this will take place. The Treasury Minister, John Healey, has made it clear to the Commissioner that the UK will need a transitional period in which to implement the changes required. The Commissioner acknowledged this but ultimately the Commission has to agree to such transitional arrangements.
Regrettably, the Commission on 30 November 2006 decided (http://eur-lex.europa.eu/LexUriServ/site/en/com/2006/com2006_0742en01.pdf) not to propose to member states an extended exemption of aviation fuel used for private pleasure aviation. Without a Commission proposal on the extended exemption, member states have no means of granting such an extended exemption. It is the exclusive right of the Commission to decide whether to propose an extended exemption or not, and member states cannot oblige the Commission to do so.
The Commission decision means that as of 1 January 2006, all EU member states will be obliged to apply EU minimum excise duties on aviation fuel for private pleasure flying. Such minimum excise duties already today apply in 15 out of 25 member states, who in the past decided not to make use of the exemption granted until the end of the year.
The Commission decision of 30 November 2006 does, however, allow member states, whose private pleasure flying sector will suffer difficulties from the end of the excise duty exemption, to adopt unspecified measures aimed at "alleviating or mitigating problems of transition to the regime of standard taxation".
This decision will affect AVGAS and JET A1. The “minimum” duty rates may be found here http://ec.europa.eu/taxation_customs/resources/documents/taxation/excise_duties/energy_products/rates/excise_duties-part_II_energy_products-en.pdf
The key issue now is to ensure the UK adopts this decision sensibly, using the mitigations measures where possible. For instance the AVGAS duty today is only about 2p a litre below the EU minimum for motor fuel so there should not be a need to add the full 29p per litre difference between AVGAS and leaded motor fuel that exists today. The other critical area centres on the description of “private pleasure flying”. The Directive notes, “For the purposes of this Directive ‘private pleasure-flying’ shall mean the use of an aircraft by its owner or the natural or legal person who enjoys its use either through hire or through any other means, for other than commercial purposes and in particular other than for the carriage of passengers or goods or for the supply of services for consideration or for the purposes of public authorities.”
So what do we need to do?
We all need to make the following points to our local MP’s and your MEP if you know who they are:
The total amount of AVGAS used in the UK each year equates to 3-4 hours of motor traffic in London. The Current high price levels of AVGAS is a reflection of high global fuel prices and low volumes of AVGAS production and add to that the cost of distribution in rural areas and you begin to get an idea on the size of the problem, which leads to the present situation of Avgas at @ £1.30 per litre against Petrol at £0.869 per litre. Over 20 years ago AOPA and GAMTA (now BBGA) argued successfully for a reduction in the duty on Avgas which reduced the duty of Avgas by half when compared to the Duty on Petrol. The impact of the EU Directive is to potentially realign the tax rate.
Many small businesses, Flying Clubs, small AOC operators and aerial work operations will have much higher fuel bills which will need to be passed on to the customer which intern is likely to speed up the current flat level of activity in to a major downturn. This will affect flying clubs and flying groups particularly and they will need to increase the hourly rate as the impact of such an increase in fuel prices is very significant. When you write to your MP please ask them to ask the Treasury why we are unable to set our own tax rates? Also ask your MP to enquire as to how the Government intends to reduce the impact of this directive on the GA community.
Please send a copy of your letter to [email protected]
AOPA AND BBGA WILL MEET WITH THE TREASURY IN THE NEXT FEW DAYS AND WE WILL REPORT BACK TO YOU IMEADIATELY AFTER THAT MEETING AS WE SEEK THE BEST WAY TO MITIGATE THIS UNDEMOCRATIC DECISION.
Thank you
Martin Robinson Mark Wilson
Chief Executive AOPA Chief Executive BBGA
Not entirely sure what to make of this, but if it really does mean AVGAS could go up another 27p per litre ... !! :ugh: :ugh: :ugh:
Anyone know the story ?
FF :ok:
Dear Member
We have another problem on which we seek your help. The text in this email has been developed jointly between AOPA and BBGA as we work together to try and do something about this very difficult problem.
The news that the EU Commission has rejected the UK’s application for the retention of the current Duty derogation on AVGAS and JET A1 is very disappointing.
The UK’s Application to the Commission, developed after discussions we held with the Treasury, stated the following:
The United Kingdom would like to apply exemption from excise duties to fuel used for the purpose of private pleasure flying. Private use of jet fuel would be fully exempted from duties and aviation gasoline would be taxable at a reduced rate of half the tax rate for leaded gasoline. The United Kingdom maintains that there are minimal benefits from the shift to the standard tax treatment in comparison to the costs and other consequences associated with the expiry of the derogation. Therefore the main objective of the measure is to avoid costs of transition. In particular, the United Kingdom highlights the compliance costs on suppliers of aviation fuels and on the industry and stress the administrative costs and enforcement difficulties for the administration associated with the expiry of the derogation. The United Kingdom further explains the negative effects on both the private pleasure-flying sector and many small businesses associated with it. Furthermore, it would increase the cost of training which would grow the trend for pilots to train in the United States. In addition, removing the derogation would raise safety issues if users were tempted to put unleaded petrol rather than aviation gasoline. On the other hand, the United Kingdom points out the insignificant revenue gain and the small benefit in terms of carbon emission saved associated with introduction of the general tax treatment
Although the derogation officially ends on 31 December nothing will happen for the moment. The government has to work out what measures are necessary, how to enforce them and in what timeframe this will take place. The Treasury Minister, John Healey, has made it clear to the Commissioner that the UK will need a transitional period in which to implement the changes required. The Commissioner acknowledged this but ultimately the Commission has to agree to such transitional arrangements.
Regrettably, the Commission on 30 November 2006 decided (http://eur-lex.europa.eu/LexUriServ/site/en/com/2006/com2006_0742en01.pdf) not to propose to member states an extended exemption of aviation fuel used for private pleasure aviation. Without a Commission proposal on the extended exemption, member states have no means of granting such an extended exemption. It is the exclusive right of the Commission to decide whether to propose an extended exemption or not, and member states cannot oblige the Commission to do so.
The Commission decision means that as of 1 January 2006, all EU member states will be obliged to apply EU minimum excise duties on aviation fuel for private pleasure flying. Such minimum excise duties already today apply in 15 out of 25 member states, who in the past decided not to make use of the exemption granted until the end of the year.
The Commission decision of 30 November 2006 does, however, allow member states, whose private pleasure flying sector will suffer difficulties from the end of the excise duty exemption, to adopt unspecified measures aimed at "alleviating or mitigating problems of transition to the regime of standard taxation".
This decision will affect AVGAS and JET A1. The “minimum” duty rates may be found here http://ec.europa.eu/taxation_customs/resources/documents/taxation/excise_duties/energy_products/rates/excise_duties-part_II_energy_products-en.pdf
The key issue now is to ensure the UK adopts this decision sensibly, using the mitigations measures where possible. For instance the AVGAS duty today is only about 2p a litre below the EU minimum for motor fuel so there should not be a need to add the full 29p per litre difference between AVGAS and leaded motor fuel that exists today. The other critical area centres on the description of “private pleasure flying”. The Directive notes, “For the purposes of this Directive ‘private pleasure-flying’ shall mean the use of an aircraft by its owner or the natural or legal person who enjoys its use either through hire or through any other means, for other than commercial purposes and in particular other than for the carriage of passengers or goods or for the supply of services for consideration or for the purposes of public authorities.”
So what do we need to do?
We all need to make the following points to our local MP’s and your MEP if you know who they are:
The total amount of AVGAS used in the UK each year equates to 3-4 hours of motor traffic in London. The Current high price levels of AVGAS is a reflection of high global fuel prices and low volumes of AVGAS production and add to that the cost of distribution in rural areas and you begin to get an idea on the size of the problem, which leads to the present situation of Avgas at @ £1.30 per litre against Petrol at £0.869 per litre. Over 20 years ago AOPA and GAMTA (now BBGA) argued successfully for a reduction in the duty on Avgas which reduced the duty of Avgas by half when compared to the Duty on Petrol. The impact of the EU Directive is to potentially realign the tax rate.
Many small businesses, Flying Clubs, small AOC operators and aerial work operations will have much higher fuel bills which will need to be passed on to the customer which intern is likely to speed up the current flat level of activity in to a major downturn. This will affect flying clubs and flying groups particularly and they will need to increase the hourly rate as the impact of such an increase in fuel prices is very significant. When you write to your MP please ask them to ask the Treasury why we are unable to set our own tax rates? Also ask your MP to enquire as to how the Government intends to reduce the impact of this directive on the GA community.
Please send a copy of your letter to [email protected]
AOPA AND BBGA WILL MEET WITH THE TREASURY IN THE NEXT FEW DAYS AND WE WILL REPORT BACK TO YOU IMEADIATELY AFTER THAT MEETING AS WE SEEK THE BEST WAY TO MITIGATE THIS UNDEMOCRATIC DECISION.
Thank you
Martin Robinson Mark Wilson
Chief Executive AOPA Chief Executive BBGA
Not entirely sure what to make of this, but if it really does mean AVGAS could go up another 27p per litre ... !! :ugh: :ugh: :ugh:
Anyone know the story ?
FF :ok: