Fuel duty binned, and other budget highlights
Chancellor of the Exchequer George Osborne has delivered the latest UK budget including the cancellation of planned fuel duty increases. Other key points include confirmation that the income tax threshold will be raised to £10,000 by next year and the first £2000 will be taken off all employers’ National Insurance bills. Growth is forecast to be 0.6 per cent this year, with £3 billion promised for infrastructure investment as a way of improving this. Beer duty will be cut by 1p a pint.
The SMMT said the budget “recognised the significance of developing a balanced industrial strategy, as well as taking steps to encourage research and development in the UK through enhanced tax credit rules”. The motor manufacturer’s association point to “welcome changes” to the Company Car Tax (CCT) regime with increased incentives for the take-up of ultra-low emission vehicles (ULEVs) as particularly highlights along with promises for government to provide £1.6 billion of funding to support sector strategies, including automotive, during the course of 2013.
“We look forward to further sector-specific measures which will come out later this year in the Automotive Sector Strategy, that will look deeper into protecting and enhancing the UK automotive supply chain, and boost innovation and skills within a competitive domestic business environment. This will provide a distinct rationale and incentive for companies to invest in the UK”.
Petrol Retailers Association (PRA) chairman Brian Madderson welcomed the government’s decision to cancel the fuel duty increase scheduled for 1 September: “Taking into account the projection of RPI% in the first quarter of 2014, combined with the current 20 per cent VAT rate, this action will save the motorist up to 3ppl. This could even stem the continuing decline in overall retail fuel volumes, which according to last year’s Government statistics dropped by 2.9 per cent compared to 2011.”
However the association clearly would have like to have seen more done. “…with the Treasury benefiting from the tax windfall of higher VAT over the last two years on ever rising fuel prices, independent retailers had wanted this windfall to be used to cut fuel duty in this budget….The chancellor has missed a golden opportunity to start correcting the penal 60 per cent tax on retail road fuels.”
Sue Robinson of the National Franchise Dealers Association was similarly positive, adding: “The NFDA welcomes the general transport measures on fuel duty and road upgrades which will benefit road users across the UK. This is turn should have a positive effect on the vehicle market