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Pre Budget Report increases fuel duty

The Chancellor has ended the Government’s freeze on fuel duty increases with a 2p a litre rise in duty from 01 December 1, 2008.
Filling up with fuel
Fuel duty rise - adds to business costs

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25 November 2008

Filling up with fuel
Fuel duty rise – adds to business costs

THE Chancellor has increased the cost of fuel with a 2p rise in fuel duty which will affect all those small businesses and trades running business vans.

The 2p rise represents the duty that was frozen while pump prices remained high.

According to the Chancellor, the 2.5% cut in VAT from the same date means the cost of petrol and diesel at the pumps will fall. And therefore motorists should see no increase in the price they pay at the pump as a result of the move.

However, John Lewis, director general of the British Vehicle and Leasing Association (BVRLA), said that all business road users would be reeling from the Chancellor’s cynical decision to offset the reduction in fuel VAT with an increase in fuel duty.

“While the reduction in VAT is temporary, the increase in fuel duty is not,” commented Lewis.

“Businesses can reclaim the VAT cost of their fuel regardless of the rate. But they cannot reclaim fuel duty. Hauliers and other businesses that depend on road transport will be bitterly disappointed by this devastating increase in costs. The Chancellor has given the road transport industry a real kicking.” 

The Pre Budget Report also confirmed that, as pre-announced in Budget 2008, main fuel duties will further increase by 1.84p per litre on 01 April, 2009; and 0.5p per litre above indexation on 01 April, 2010.

VED goes up by £5

  • Also announced in the Pre Budger Report was an increase in Vehicle Excise Duty (VED) – or road tax.
  • VED will increase by £5 to £125 per year for 2009-10 for all Euro4 and and Euro5 vans.
  • The standard rate goes up £5, as well, to £185.

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Ralph Morton

Ralph Morton

Ralph Morton is an award-winning journalist and the founder of Business Car Manager (now renamed Business Motoring). Ralph writes extensively about the car and van leasing industry as well as wider fleet and company car issues. A former editor of What Car?, Ralph is a vastly experienced writer and editor and has been writing about the automotive sector for over 35 years.

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