Fuel duty is frozen as Hunt extends 5p-a-litre cut for 12 months: How much of petrol and diesel is made up of tax?

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  • Chancellor Jeremy Hunt confirms that the duty on fuel will remain frozen at 57.95 liters per year.
  • In his spring budget statement, he also extended a 12-month fuel duty cut by 5p.
  • Even with the tax on fuel frozen and cut, the tax is a third of what drivers pay at gas stations and about half of the total cost including VAT.

Chancellor Jeremy Hunt confirmed in his spring budget that fuel tariffs will remain frozen for the thirteenth year in a row, and he will extend the 5p per liter cut for another 12 months.

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Easing the burden of higher petrol and diesel prices on UK motorists, Hunt said in a speech on Wednesday: “As inflation remains high, I have decided that now is not the right time to raise inflation-adjusted fuel duties or increase the duty.

“Over the next 12 months, I’m also going to keep the 5p and freeze the fuel tax.”

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The freeze is estimated to save drivers about £6bn a year, with the RAC estimating that a 12-month extension of the 5p per liter fuel duty would save motorists about £3.30 per fill-up.

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Relief at gas stations for motorists: the duty on fuel will remain frozen, and the “temporary” tax cut of 5p per liter, introduced last year, has been extended, it was confirmed today.

The freeze means the duty on fuel will remain at 57.95p per litre, as it has been since March 2011.

Rishi Sunak’s “temporary” 5p tax cut on Rishi Sunak’s fuel, introduced last year in an attempt to stave off pump prices, will also be extended until March 2024, meaning the duty will remain at 52.95p for the next 12 months.

The news came as a huge relief to the country’s drivers after fears prices could rise 12p a liter from this month.

Following last year’s fall budget, the Office of Budget Responsibility’s (OBR) report on economic and fiscal outlook for this month lists “a planned 23 percent increase in the fuel duty rate” in its analysis.

Other spring budget measures that will affect motorists this year

1. The Pothole Foundation receives an additional £200 million after the Granthshala campaign.

Hunt has pledged an additional £200m to local councils to help fix potholes across the UK, 20% more than the money allocated to repair our cratered roads.

This comes after a Granthshala campaign called on the government to clean up our crumbling streets and reduce record high levels of driver complaints, pothole-related car breakdowns and repair bills, and compensation claims filed by motorists with local authorities.

The Chancellor told the House of Commons: “After a wet and then cold winter, I have received especially strong ideas about the curse of potholes.

“The Spending Review allocated £500m annually to the Pothole Fund, but today I have decided to increase that fund by another £200m next year to help local communities address this issue.”

2. Vehicle tax rates will increase in line with the RPI, but the final ranges are yet to be confirmed.

Starting April 1, 2023, the government will raise transport excise (or vehicle tax) rates for cars, vans and motorcycles in line with the RPI.

With an RPI of 10.1%, this is likely to result in an increase in car tax for most drivers.

To support the transport sector, Vital and Essential Drugs for heavy vehicles will remain frozen for 2023/24.

3. Truck tax reform

Following consultations in 2022, the government will introduce a new reform of the heavy duty vehicle tax from August 2023, after the scheduled end of the current levy suspension period.

Heavy duty vehicle tax reforms are another step towards reflecting the environmental performance of the vehicle.

The Government remains committed to ensuring that the levy applies to all heavy vehicles using the UK road network.

It says the increase will add £5.7bn to government revenue next year and represents a “record increase in cash”.

MPs warned the chancellor that raising fuel prices would be “political suicide,” especially as the price of gasoline and diesel hit a record high in the previous 12 months and remains relatively high today.

According to the latest data from RAC Fuel Watch, the average price of a liter of gasoline in the UK on Tuesday was 147.28 pence, while diesel cost 166.05 pence.

Mr Hunt told the Commons that freezing fuel duties and extending the 5p per liter cut “will save the average driver £100 next year and around £200 since the 5p cut was introduced”.

Priti Patel, who delivered a 121,000-signature petition in Downing Street last week calling on Jeremy Hunt to freeze or cut fuel duties, called the announcement “a big win for fuel price cut drivers and families and businesses across the country.” country.” We welcome the Chancellor’s decision to maintain the moratorium on fuel duties.”

FairFuelUK campaigner Howard Cox noted Mr Hunt’s decision, saying: “Fortunately, the longest consumer tax freeze continues.”

Also responding to the news, Steve Gooding, director of the RAC Foundation, added: “It may be tempting to see a freeze on fuel duties in terms of distribution to motorists, but it’s actually a stimulus to the economy.”

“Fuel prices are a huge part of the household budget for many millions of people and a huge cost to businesses that inevitably gets passed on to consumers.”

RAC head of road policy Nicholas Layes says the 5p cut has given drivers “badly needed relief” in “the hottest year at gas stations”.

“Given the importance of driving for consumers and businesses, tolls should be low to help fight inflation,” he added.

AA’s Jack Cousins ​​said, “Not only will this save drivers the drudgery of gas station work, but it will also help drive down the prices of goods and services as they are mostly transported by road.”

Gordon Ballmer, chief executive of the Gasoline Retailers Association, which represents independent petrol stations across the UK, said: “Gasoline and diesel prices remain highly volatile due to the ongoing war in Ukraine. Many car enthusiasts will breathe a sigh of relief …

Credit: www.thisismoney.co.uk /

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