The AA notes that fuel duty receipts keep rising
We at CaravanTimes know that all our readers pay taxes (at least we assume), but we did not realise how much of UK taxes come from the pockets of motorists.
One week ago the AA took a poll with a populous of 25,810 AA members and 73 per cent fear motoring taxes will rise post-election. Of all UK taxes, over 10 per cent come from the pockets of motorists.
From January to May fuel duty receipts have increased £120 million when compared to last year. Last year’s numbers were more than £2 billion higher than receipts from 2007 – 2008 before the recession.
Current chancellor, George Osborne, promised the fuel duty freeze that came into effect in 2011 would continue in September, but the AA is worried, citing that “urban emissions scare-mongering will be used as an excuse for raising fuel and car ownership tax (VED)” as has already occurred in some parts of London where there is a £100 levy for those who own a diesel car.
Osborne committed to canceling the fuel duty rise in September back in the March budget, but the AA has since reported that over the last three months the Treasury has actually been receiving an extra 0.5p a litre in VAT from non-business diesel drivers. The wholesale price of diesel has been the same, or even 3p a litre lower than petrol, fuel retailers have been pricing 6p a litre higher for diesel. Twenty percent of that cost is VAT.
According to the AA, UK voters with cars or other vehicles pay more in fuel duty (£26.9bn) alone that UK firms and companies pay in business rates (£26.8bn). Other vehicle excise duties gain another £6.1bn and VAT on fuel and car sales, company car tax and insurance premium tax raise £25bn. In the last financial year the UK raised £582.6 billion, 10 per cent came from motorists.
The AA recognises that these values will not include VAT from car repairs, parking charges, parking permits, bridge tolls, and penalty charge notices like parking and moving traffic offences.
The motoring organisation is calling on the Chancellor to be more innovative and use existing tax to influence the behaviour of motorists to help the government meet CO2 and emissions targets, while also generating more tax in the short-term. The AA lists several ways to help accomplish this, including electric cars, road improvements, vehicle revolution, and the conversion of main urban polluters.
President, Edmund King said: “The AA does not want a U-turn on the promised continued fuel duty freeze for September and reminds government that, if it is planning future rises, it is a tax related more to mileage than means. Owners of high performance cars pay extra for the vehicle’s higher fuel consumption but it also stunts the income of less well-off drivers for whom mileage may be the difference between having and not having a job.
“For that reason, fuel duty should remain frozen and other motoring avenues, that generate tax but also stimulate development, should be tried. A scrappage scheme could pay for itself through VAT and could serve the dual function of raising tax and meeting national emissions targets,” King continued.
“Simply piling on more fuel duty when high pump prices undermine demand will backfire on the Government. It mirrors some London boroughs’ barely-disguised local tax grab from parking permit holders, and misses an opportunity to stimulate a green change in transport – and a tax windfall to help settle the country’s books.”
Do you think the AA’s got the right idea?
