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The Budget: 3p fuel duty rise scrapped – and a good day for beer drinkers

fuel duty

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20 March 2013

Woman fills up with fuel
The increase would have put £1.50 on an average fill-up, enough for a half of lager – provided you’re not driving home of course

THERE are cautious signs of welcome news for SMEs in the Chancellor’s 2013 Budget.

First, he’s scrapped the planned fuel duty rise in September.

The fuel duty rise was originally scheduled for April this year and was then postponed to September; now it’s been scrapped altogether.

Chief Executive, Phil Orford, of the Forum of Private Business has described today’s announcement on fuel duty as a ‘helpful’ concession for business and the economy.

Fuel prices have risen by around 6.5p per litre since January and a further increase would have been extremely bad news for SMEs across the country, especially those in more remote areas where the cost of travel is a significant factor in their business costs.

The fuel duty rise would have cost vehicle users nearly £4 billion over the next 5 years

Paul Jackson, managing director of fleet management specialist TMC, said: “Scrapping the autumn fuel duty increase will save Britain’s 30-plus-million vehicle users nearly £4 billion in tax over the next five years.

“But we estimate that businesses currently pay around £1.6 billion a year too much for mileage due to exaggerated claims put in by the country’s five million business drivers. To make the most of the fuel duty move, firms need to keep a close eye on fuel claims and use cost-effective tools to prevent over-claiming.”

The planned rise would have had an adverse impact on those business owners, self-employed workers and small business staffers running their private cars on business mileage and using the tax-free AMAPs for business mileage reimbursement, putting them even further out of alignment with the true costs of motoring.

The planned cut in Corporation Tax to 20% from April 2015 will be welcomed only by larger companies since SMEs are already on this rate.

And finally, something for all beer drinkers to welcome. The beer duty escalator has not only been scrapped in the budget, but the Chancellor also reduced the duty by 1p a pint!

We’ll drink to that.

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Matt Morton

Matt Morton

Matt Morton is an automotive content writer for Business Car Manager

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