Business drivers let off tax rise on fuel
THERE will be no 3p a litre tax increase on fuel from January – that’s the welcome, if not unexpected, news from the Chancellor in his Autumn Statement today (29 November 2011).
The 3p tax rise is still on the horizon though – so don’t start whooping it up just yet. The rise has been delayed until August; and the 2p increase due for August has been abandoned.
All of which will be good news for business drivers and small businesses that need to peddle the motorways and byways of Britain on business.
Nevertheless, the Federation of Small Businesses (FSB) warned that deferring January’s fuel duty increase will hit small firms and households in August.
The FSB wants a longer-term solution that not only takes the volatility out of fuel prices but the politics as well. “Small businesses need to be able to know what their overheads will be in six months time and that is why the FSB is calling for a true fuel duty stabiliser mechanism,” said John Walker, FSB’s national chairman.
It’s something we’d like to see here at BCM – see our special report Dare you fill up? Fuel costs put the squeeze on business
The Chancellor confirmed the 3p rise in fuel duty in January cancelled and the 5 pence per litre rise proposed for August 2012 would be reduced to 3 pence per litre with the following words: “In the Budget I cut fuel duty by one penny. The plan was for fuel duty to be 3 pence higher in January and 5 pence higher by August next year. That would be tough for working families at a time like this.
“So despite all the constraints that are upon us, we are able to cancel the duty increase planned for January and for fuel duty from August to be only 3 pence higher than it is now. Families will save £144 on filling up the average family car by the end of next year.”
Julie Jenner, chairman of ACFO, added: “The intensive business and consumer lobby against fuel duty increases when corporate and private budgets are under so much pressure meant the Chancellor had no choice but to cancel the January increase.
“By cutting the proposed August 2012 duty increase to 3p a litre from 5p a litre I think he has tried to appease the protests but has also brought himself time to see how the economy is performing in eight months. We are sure he will look again at fuel duty in the spring Budget.
“However, while we are pleased that the Chancellor will not press ahead with the 3p a litre January increase, fleets, business drivers and private motorists are no better off. Fuel prices remain extremely high so it would have been more helpful if he had relieved pressure on business and private fuel budgets by cutting duty.”
Other measures affecting business motoring included the announcement of some £30bn funding for infrastructure projects, including improvements to the M25 London Orbital and tackling areas of congestion and improving the national road network, particularly two new managed motorway schemes at congested times on the M3 and M6.
IAM chief executive Simon Best said: “£270 million for managed motorways is good news. In some cases managed motorways have halved the number of crashes. They also ease congestion and cut carbon emissions. The extra money for our A roads is also welcome. But while today’s announcement will help, we need serious and sustained investment across the UK’s road network.
“Our roads are crying out for basic maintenance. Crumbling roads and potholes are a serious problem and a road safety hazard, especially for those on two wheels.”
Boost for low emission goods vehicles
Meanwhile those involved in the haulage and business van markets should note that capital funding of £8 million will be made available by the government in 2012 to encourage the UK’s road freight industry to buy and use low emission medium and heavy goods vehicles.The planned investment will be managed by the Technology Strategy Board (www.innovateuk.org). The funding includes £6.5 million for a low emission goods vehicle demonstration trial, plus the supporting infrastructure for trial vehicles, with a further £1.5 million targeted funding for public gas refuelling hubs.
The government wants to reduce the market barriers to the uptake of low emission HGV technologies – such as hybrid, electric and gas – and wants the development of a UK manufacturing base in these technologies and their component parts.
“Facilitating investment in these technologies and their supporting infrastructure, and encouraging and assisting UK operators to buy and use low emission medium- and heavy-goods vehicles, will develop an early stage market for the technologies, helping to ensure the development of a UK manufacturing base that can compete in the international low emission vehicle market,” said a spokesperson for the Technology Strategy Board.
Also read this Make sure you claim the right amount for business mileage: New company car mileage rates
Photo credit: Shell.
