Fuel duty goes up but no change in AMAPs

From today (01 December) the cost of fuel looks set to rise.

Despite a drop in the rate of VAT to 15% today, fuel duty has been increased by 2p a litre.

However, the Approved Mileage Allowance Payments system (AMAPs) remains unchanged at 40p per mile. AMAPs allow business users to claim back business mileage in their private cars.

Edmund King, AA president said: “The Chancellor is giving with one hand and taking away with the other. Increasing fuel duty while reducing VAT shows that the Chancellor is playing roulette with global fuel prices. And could lose his gamble. If the global price of oil increases this hike may come back to haunt the government. And when VAT reverts to 17.5% the motorist will be hit at the pumps once again.”

According to the AA, the 2.5% cut in VAT will save 1.72p on a litre of unleaded at the pump.

The price of petrol pre 01 December was 92.88: 50.35 fuel duty and 13.83 VAT at 17.5%.

At 15%, that would be 50.35 fuel duty and 12.11 VAT. The difference is 1.72 ppl. However, when fuel duty increases by 2p per litre then the saving on VAT will be lost and the Chancellor gains 0.5 pence per litre.