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The European Commission is taking the UK to court in a long-running row over its policy of allowing leisure boats to use lower-taxed red diesel.

Brussels is disputing laws which permit recreational boats to buy the fuel commonly used by fishing vessels.

The UK government does require boats using red diesel to pay full duty and acknowledge they may face penalties for using it outside its waters.

But the EC says the UK is "not properly applying" European excise rules.

Opt-out

Red diesel, which is also used by the farming and forestry industries, is one of several European products that is "marked" with a dye to designate its lower tax duty. It can be up to 40% cheaper than diesel typically sold at petrol stations.

Red diesel can be used by UK boats for heating purposes but using it to power engines is illegal.

Under an opt-out from EU directives, recreational boat owners in the UK were able to use red diesel for several years but this provision expired at the end of 2006.

Brussels began infringement proceedings in 2011, claiming the UK was not adhering to EU directives designed to prevent improper use of certain petroleum products.

After pressure from the European Commission, the UK changed the law in 2013 to require boat owners and fuel distributors to sign a form acknowledging that its approach to red diesel only applied in UK waters and not the rest of the EU.

But announcing its referral to the European Court of Justice, the EC said: "Private leisure boat owners are often in a situation where they can only purchase marked fuel. As a consequence, private leisure boats may not pay the right amount of tax."

The UK Treasury is yet to respond to a request for comment on the EC decision.