Tax-free Petrol too good to be true?

Mon 16 Apr 2007

This sounds like an April fool - but it's not! An enterprising businessman (aka "convicted fraudster" according to The Herald newspaper) in Alloa, Scotland is selling petrol at 35p a litre, claiming he has found a way around taxation legislation.

James McDonald's Auld Brig Filling Station in Tullibody, Clackmannanshire, is operating as the Motor Vehicle Protection Association (MVPA). This is set up as a research organisation, allegedly developing a device called the Ripple Generator aimed at reducing carbon emissions and cutting fuel consumption - though McDonald has stated that he has not yet fitted a device to a car. He claims that he can legally sell up to 50 litres a week per car free of excise duty for research purposes, to as many cars as he deems appropriate for a research project. He hopes to open stations all over Britain. To join the scheme, you pay 100 for your car to be a member, which also allegedly endows the car with basic insurance cover to be driven on the road by any driver holding a UK driving licence.

He is quoted as saying that his fuel is coming from Spain, exploiting EU provisions that prohibit customs duties between member states. That might get around the problem that all fuel bought in the UK has the excise duty added to it when purchased from the refinery (and we hear that McDonald has applied for a dispensation waiving it, but not been granted one) -  but if he is doing that, how on earth is he getting the fuel from Spain to Scotland? Even if he has found a way, how can he keep the price as low as 35p a litre?

It has been suggested that in fact he is buying fuel at the full UK price and selling it at a thumping loss, depending on being granted a dispensation -  which we have on good authority he will not get. So, even if theres 100% profit margin in the 100 'insurance' charge, he can only provide three weeks worth of fuel at 35p a litre before he's losing. So, if you've signed up, enjoy your cheap fuel while you can, because its not likely to be there for long. 'By Malcolm McKay'

 

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