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No tax increase for use of ‘red diesel’ for Travelling Fairs & Circuses

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The Government officially announced yesterday that the entitlement to use ‘red diesel’ and rebated biofuels from April 2022 will continue for powering the machinery (including caravans) of travelling fairs and circuses”

The government has released a Policy Paper, in conjunction with the presentation of yesterday’s Budget, by the Chancellor, Rishi Sunak in the House of Commons today.

The White Paper entitled ‘reform of red diesel and other rebated fuels entitlement’  describes the  introduction of legislative changes through Finance Bill 2021 and subsequent secondary legislation to restrict the entitlement to use red diesel and rebated biofuels from April 2022 to a series of qualifying purposes:

This includes, among six specific uses:  for powering the machinery (including caravans) of travelling fairs and circuses”

In a nutshell, this is the outcome of the recent consultation from last summer and previous similar consultations, that everyone on the Fairground and circus industries and communities had both hoped for and had worked hard to achieve.

The Treasury recognised the concerns that the Fairground and Circus industry had in the submissions from all the associations, working together: The Showmen’s Guild of G.B.; Association of Independent Showmen; Society of Independent Roundabout Proprietors, Association Amusement Catering Equipment Society, and the Association of Circus Proprietors. The government reflected these concerns in their decision-making drawn from a summary of responses:

The government noted that they  received a number of responses from operators of travelling fairgrounds and circuses, along with their representatives, who suggested that red diesel represents a relatively large proportion of their costs and that they had very limited capacity to absorb these costs. They suggested this would have a material impact on ticket prices paid by the people visiting these attractions.

Following the consultation, the government has decided to grant further entitlement to use red diesel for: The travelling fairground and circus industries when diesel is used for powering their machinery (including their caravans); in addition to three other groups; to add to the previously-announced entitlements for agriculture, trains and non-commercial heating

Speaking of the positive result of this consultation, the planned Finance Bill that will make it law and the work in achieving this result, Philip Paris, President of the Showmen’s Guild of Great Britain said today:

“I am delighted to hear this news on behalf of our 2000 members and 23,000 family members, as well as all those in the wider Fairground and Circus community.

The President continued:

“We have worked hard in recent years, especially in this last year, even during the pandemic, alongside our colleagues together, from: The Association of Independent Showmen; the Society of Independent Roundabout Proprietors, the  Amusement Catering Equipment Society and the Association of Circus Proprietors.

Between us we presented detailed arguments on behalf of all our members, who themselves contributed detailed information on usage and how their businesses work.

We are pleased that the Treasury and the Government listened to our arguments, concerns and our passion for our special entertainment industry, heritage, and way of life and that they understand the value of our travelling entertainment to local communities nationwide.

We are also grateful for the work and assistance of the All-Party Parliamentary Group on Fairs & Showgrounds; the DCMS and other parliamentarians in highlighting our submissions. This campaigning is at the centre of the work of the Showmen’s Guild since it started 132 years ago, which and also includes achieving the addition on the online Census 21 form, of the option of ethnic identification: “Showman / “Showwoman”.

Mr Paris concluded:“This very welcome news  is a great relief to us all, at a time of such uncertainty and following a year of  no business for many and very little for others. We look forward to reopening our travelling entertainment with renewed confidence  and hope to work  positively with local and regional authorities across the country, to make this a reality, for the benefit of the Showmen &Women and for our loyal audiences nationwide.”

Further details of the consultation and relevant submissions, especially from the Fairground and Circus Industries, as well as details of all the categories granted continued Red Diesel tax concession entitlement are listed below

The government received 436 written responses to the consultation  including responses from 244 companies and trade bodies, 7 public sector organisations, 8 charities, and 177 individuals. Highlights included

  1. Regarding ‘Impacts on the price of goods and services households and/or voluntary organisations use or pay for over the long-term’; the Treasury reported in their summary of responses to the Consultation:

“The travelling fairground and circus sector made persuasive arguments about the potential impact on ticket prices if their fuel costs rose. As a result, the government accepts that losing the entitlement to use red diesel could have a material impact on the costs of the entertainment that they provide to families all around the country.”

  1. The Treasury also accepted that:

“In the absence of viable alternatives to diesel-powered equipment and machinery, most respondents suggested that the tax changes would result in businesses switching from red diesel to ‘white’ (standard rated) diesel in April 2022, instead of switching to greener alternatives. “

  1. They continued:

“As a consequence of this, some stakeholders argued that the proposed changes would not result in positive environmental impacts over the long-term since the same amount of diesel would be used, just at a higher rate of duty. “

  1. The Treasury noted:

“Fuel costs as a proportion of total costs varied widely depending on the business and sector. Most respondents (including the Fairground and Circus associations) noted that their fuel costs would double following these tax changes and that they would need to pass these extra costs down the supply chain.”

  1. The Treasury also noted, importantly that:

“Many respondents (again including the Fairground and Circus associations) suggested that they did not expect to have recovered from the impacts of the COVID-19 pandemic by April 2022, and that the increasing fuel costs will make it more difficult for them to recover and limit their ability to absorb extra costs.

To summarise: what this means for entitlement following the consultation:

the government confirms that it will not remove the entitlement to use red diesel from April 2022 for the following uses (originally announced at Budget 2020):

  • The travelling fairground and circus industries when diesel is used for powering their machinery (including their caravans).

As well as

  • The commercial boat operating industry, including fishing, inland water freight and passenger ferries.
  • Non-commercial power generation, including households who rely on red diesel for electricity generation in areas not connected to the electricity grid.
  • Registered community amateur sports clubs as well as all golf courses.

In addition to the previously agreed allowance for the concession to be continued

  • In agriculture, forestry, horticulture, and fish farming
  • As fuel to propel passenger, freight, or maintenance trains & equipment
  • For non-commercial heating. Including places of worship and town hall

The precise definition of these entitlements to use red diesel beyond April 2022 will be set out in the legislation covering the tax changes that will be introduced in the upcoming Finance Bill.

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