Latest news with #fuelduty
The Independent
3 days ago
- Business
- The Independent
Millions of UK drivers could benefit from Rachel Reeves' policy
Rachel Reeves is reportedly set to freeze fuel duty again this autumn to help drivers struggling with the cost of living. The decision will maintain the current 5p per litre cut introduced in 2022, despite calls to increase the tax to address public finance shortfalls. Maintaining the freeze and the existing cut is estimated to cost the Treasury around £5 billion annually. Treasury sources indicate that a hike in fuel duty will not be part of Ms Reeves' Autumn Budget, as she believes it would be the 'wrong choice' for working people. Analysis by a think tank suggests that continuous freezes and cuts to fuel duty since 2012 will have cost the government over £200 billion by 2028.
The Independent
3 days ago
- Business
- The Independent
Rachel Reeves ‘could extend fuel duty freeze in autumn Budget' in cost of living boost
Rachel Reeves will freeze fuel duty again this autumn in a boost to drivers still struggling with the cost of living, it has eben reported. The chancellor reportedly feels vindicated by a freeze on the levy last October, despite calls from campaigners and economists to hike the tax. As she seeks to fill a multi-billion pound black hole in the public finances, she has faced fresh calls to end the long-running freeze on fuel duty, which has been in place since 2011. Maintaining the freeze, and keeping in place a 5p cut brought in by Rishi Sunak as chancellor in 2022, is expected to cost around £5bn per year - the same as Labour's U-turn on planned benefit cuts. But The i reported a hike in fuel duty in line with inflation will not form part of Ms Reeves' Autumn Budget as she seeks to balance the books. Treasury sources told the newspaper the freeze is an example of the Treasury being 'front-footed' in tackling the cost of living pressures facing households. The headline rate on standard petrol and diesel is 52.95 pence per litre, a level which would ordinarily rise in line with inflation. But the repeated freezing of the measure means that, since George Osborne first made the move, the rate has fallen by more than a third in real terms. The Social Market Foundation, a think tank, said freezes and cuts since 2012 will have cost the government more than £200bn in total by 2028, more than the budget for the NHS. After Ms Reeves kept the rate of fuel duty flat last October, former Institute for Fiscal Studies director Paul Johnson said: 'Almost unbelievably this Government has followed the practice of its predecessor in freezing rates of fuel duties and not allowing the 'temporary' 5p cut to expire, while raising other taxes dramatically and claiming to be focused on tackling climate change.' But Ms Reeves said hiking fuel duty would be the 'wrong choice' as she unveiled what she called 'very difficult decisions' on tax elsewhere. Ms Reeves said: 'To retain the 5p cut and to freeze fuel duty again would cost over £3 billion next year. 'At a time when the fiscal position is so difficult, I have to be frank with the House that this is a substantial commitment to make. 'I have concluded that in these difficult circumstances – while the cost of living remains high and with a backdrop of global uncertainty – increasing fuel duty next year would be the wrong choice for working people. 'It would mean fuel duty rising by 7p per litre. So, I have today decided to freeze fuel duty next year and I will maintain the existing 5p cut for another year, too. 'There will be no higher taxes at the petrol pumps next year.' A Treasury source said they would not comment on speculation ahead of the Budget.
The Sun
3 days ago
- Automotive
- The Sun
Fury after motorists paid more than £20billion in VAT last year just to buy and run cars
MOTORISTS paid more than £20billion in VAT last year just to buy and run cars — making it one of the biggest taxes on driving. Figures show consumer spending on vehicles hit £137billion in 2024, the third highest on record. That generated £22.8billion in VAT for the Treasury, almost matching the £24.6billion raised from fuel duty. But £14.9billion of that fuel duty came from diesel, which is mainly used by haulage firms — not everyday drivers. Meanwhile, tax receipts from Vehicle Excise Duty are around £8billion a year. AA president Edmund King said: 'There's a threat of increased motoring taxation as the Chancellor seeks to balance the books. "But the latest Office for National Statistics consumer spending statistics reveal the hidden tax take from private motorists.' He added: 'The danger of ramping up motoring costs is that it affects individuals and businesses — and ultimately fuels inflation.' His warning came as fears mounted that Chancellor Rachel Reeves is considering a fuel duty hike in her next Budget to cover the cost of reversing welfare cuts. The Sun's Keep It Down campaign has helped freeze fuel duty since 2011 — saving drivers thousands. Reform UK's Richard Tice said: 'These figures show drivers are being clobbered with a stealth tax bill worth billions. 'With VAT raking in more than fuel duty, the idea of hiking it further is a disgrace. Labour must commit to freezing fuel duty — anything else would be a kick in the teeth for working people.' Drivers forced to pay new 'Doomsday' fee every day under July plan - it's already in effect depending on where you park_1 A Treasury spokesman said: 'We extended the fuel duty cut this year, saving drivers £3billion, and we're investing £1.6billion to fix up to seven million extra potholes.' Treasury Minister James Murray refused to comment on Labour's tax plans yesterday. He told Sky News: 'There's lots of speculation about lots of different tax measures, and I'm not going to get into that.' 1
Auto Express
06-05-2025
- Automotive
- Auto Express
Drivers take the biggest hit on ‘environmental' taxes
In case drivers were in any doubt about where so-called 'environmental taxes' hit hardest, then new figures from the UK's official Office of National Statistics spell out just how much we're coughing up to fund government expenditure. By far the biggest contribution drivers make to the national coffers comes from fuel duty, which is the cash the government rakes in from every litre of petrol or diesel you put in your tank. In total in 2024, that number hit the £24.6 billion mark. Fuel duty has been the biggest component of energy taxes since 1997, with a similar amount raised annually by schemes such as the Climate Change Levy on energy companies, which adds costs to domestic electricity bills - also paid by many drivers, of course. Advertisement - Article continues below Energy taxes form the biggest chunk of revenues falling under the ONS 'environmental tax' umbrella, but transport taxes are also a big component. Once again, drivers take the most punishment here, with motor vehicle duty paid by UK households and businesses as 'road tax' amounting to £8.2 billion. That means tax on motor vehicles make up almost £33 billion of the £54.2 billion raised by environmental taxes in 2024. The ONS describes these taxes as 'those whose base is a physical unit, for example, a litre of petrol or a passenger flight, that has a proven negative impact on the environment. These taxes should reduce the activity related to these units and therefore reduce negative environmental impacts'. Skip advert Advertisement - Article continues below Last week former Prime Minister Tony Blair ran into trouble with the current Labour administration after saying the UK's net zero environmental policies were 'doomed to fail' and losing sway with voters. Jack Cousens, the AA's head of roads policy, responded to the latest figures by saying that 'drivers will be staggered' by the contribution they're making to environmental taxes, and that although most expect petrol and diesel car use to come with some sort of tax penalty 'the share of the tax-take will be a shock'. The AA also takes issue with the number of what it calls 'stealth taxes' on drivers levied by councils under the environmental banner. 'Environmental taxes now being levied by councils, including those that can reasonably be labelled as stealth taxes, include CO2-related residents parking permits, diesel-related residents parking permits, diesel-related public parking charges, workplace parking levies, city or town parking costs where the council has stated a CO2 justification for high fees,' says Cousens, calling for 'the huge amount of money collected by them to be accounted for, and laid bare to the public.' Our Car Tax Checker tool lets you check your tax status and renewal date in seconds. Check your VED car tax now... Find a car with the experts Ford Fiesta set to return? Icon could be reborn with a little help from Volkswagen Ford Fiesta set to return? Icon could be reborn with a little help from Volkswagen The Ford Fiesta could be coming back from the dead, and our exclusive image previews how it might look New Renault 4 2025 review: as good as the Renault 5 with the bonus of extra space New Renault 4 2025 review: as good as the Renault 5 with the bonus of extra space The new Renault 4 takes everything that's good about the Renault 5 and adds extra cabin and boot space New 2025 Kia PV5 van starts from a tempting £22,645 New 2025 Kia PV5 van starts from a tempting £22,645 All-new entry into the van market promises competitive pricing and comes with a range of up to 247 miles
