postponed
The proposed rise in fuel duty has been postponed from April
2008 until October 1 2008, chancellor of the exchequer Alastair
Darling announced in today’s Budget speech.
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The decision was cautiously welcomed by both the RAC
and the AA.
Sheila Rainger, acting director of the RAC said: “”This sensible
decision is the only bright spot in a budget seemingly doing
nothing positive for the motorist.
“But postponing the increase only delays the misery for British
motorists struggling to make ends meet.”
Meanwhile, AA president, Edmund King said: “The Chancellor has
listened to us and made a sensible decision.
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By GlobalData“Two pence might not sound like much but, when it is added to
the 20 pence per litre increase in pump prices in the last year, it
could have been the last straw for many motorists.”
Alphabet
director Mark Sinclair said that plans to tie fuel duty to
inflation “could be a very dangerous move”.
Sinclair commented: “The Budget proposes to link increases in
fuel duty to inflation after 2009. This will have a multiplier
effect, with index-linked tax increases magnifying the impact of
the huge rises in fuel costs that are affecting not only road users
but all areas of business and commerce.
“The factors driving petrol prices higher may be largely beyond
the government’s control but there is no doubt that this decision
will add index to injury as well as literally fuelling
inflation.”
David
Brennan, managing director of LeasePlan
commented: “The delay in the 2 pence duty rise is welcome, although
it’s just delaying the inevitable. Businesses and motorists would
be happier if it had been discarded completely – fuel prices are
already touching £5 a gallon and any further increase just makes it
worse.
“The further duty rise proposed for 2009 is much less appealing.
Fuel prices are already close to crippling levels, without
additional rises piling on the pressure. Cigarette and alcohol
duties have been called the ‘sin taxes’, and now it seems fuel has
been added to the list of sins.”
Alphabet’s Sinclair was also disappointed by the chancellor’s
postponement yet again of a decision regarding Approved Mileage
Allowance Payments (AMAPs) for own-car business drivers. “This
issue affects millions of drivers and is not an area that can be
ignored if the government is trying to be serious about green
taxation,” he said.
However, LeasePlan’s Brennan was more sanguine, commenting:
“Some were expecting a change in Approved Mileage Allowance
Payments, but they have kept at the same level as before. This
provides a level of confidence for drivers in Employee Car
Ownership schemes, who might have wondered if they were still going
to be cost-effective. Stability in AMAP rates is good news for
these schemes.
“Of course, the more cynical view is that with fuel prices
having risen so high, the Government doesn’t need to change AMAP
rates. The money is still flooding in.”
Alistair
Kendrick, partner at Bourne Business Consulting said: “The
announcement on AMAP relief is welcomed and the suggestion that
this is to be reviewed for alignment for tax and NIC will make life
easier for those employers who administer employee car ownership
schemes.”
Motor Finance Issue: 41 – March 08
Published for the web: March 12 08 18:42
Last Updated: March 13 08 12:35
