For several months, the PRA has been lobbying ministers to introduce a fuel duty cut with 3ppl recommended for both grades. The Chancellor invited PRA earlier this month to meet senior officials at HM Treasury and HM Revenue & Customs to present their case.
A fuel duty cut would provide a boost to businesses and consumers alike as the UK economy faces the twin challenges of a weakening pound and strengthening oil price.
The Treasury is enjoying a £1bn duty and VAT windfall from increased road fuel volumes up 2.8% YOY.
Rapid growth of online deliveries is one of the cornerstones of the UK’s economic improvement. Road usage by Light Goods Vehicles (LGV) rose by +6.3% in 2015.
Rising pump prices are hitting consumers and businesses hard, resulting in an estimated £5bn reduced spend on an annualised basis.
The Treasury could start re-aligning fuel duty levels with the near Continent and regain up to £1bn/year revenue by collecting more tax from long-haul HGVs when the UK leaves the EU.
Forecast inflation increases in 2017 would be pegged back by duty cuts.
The recommendation for a 3ppl cut was endorsed by both the Road Haulage Association (RHA) and the Freight Transport Association (FTA) whose members have suffered badly with low-price competition for European hauliers.
Unfortunately, the Chancellor took the easy option of just freezing duty levels and claimed that it was a real reduction from the planned 2ppl increase. Back to more rounds of lobbying through to the next duty review.
The Autumn Statement contained a number of enticing changes to business rates, such as 100% relief for forecourts of less than RV of £12,500 in rural areas. However, this is a complex subject and retailers should consult their specialist advisers to check the impact on their business.
The increase to the National Minimum Wage adds financial stress to a sector where fuel margins have been tight for most of the past year, and it is regrettable that the Chancellor announced that employers will have additional national insurance to pay.
May you all have a bumper festive season it is well deserved!