The PRA and the RAC have welcomed the decision by the chancellor to not raise the level of fuel duty in today’s Budget.
PRA chairman Brian Madderson commented: “As the PRA has campaigned heavily against any rises in fuel duty, we naturally welcome the chancellor’s decision today. Fuel duty is a regressive tax on business and livelihoods so any attempt to increase it would have been entirely counter-productive as the economy gets back on track.
“It is by no means an over-exaggeration to say our members have kept this country moving during the pandemic and it is right that the government has recognised that undeniable fact.”
“Despite employing over 100,000 people and serving as the sole lifeline to many communities, petrol retailers have long been burdened with excessive taxation. In future strategies to balance the public finances, our members must not be viewed simply as an easy cash cow. The PRA will continue to fight tooth and nail against any disproportionate measures.”
To generate more money for the Exchequer the PRA is advocating an ‘Al Capone’ initiative to recover the £1bn a year in tax income it estimates is being evaded by non-compliant hand car washes.
The PRA points out that in addition to establishing a long-term and significant revenue stream, it would have the added benefit of combating human trafficking and money laundering.
Also welcoming the freeze on fuel duty, RAC head of policy Nicholas Lyes said: “Drivers will breathe a sigh of relieve that the chancellor has decided not to ‘rock the fuel duty boat’. We feared this would only pile further misery on drivers at a time when pump prices are on the rise and many household incomes are being squeezed as a result of the pandemic.
“Many drivers see their cars as a safe way to carry out essential journeys and believe having access to a vehicle is even more important as a result of the pandemic. If the chancellor had raised fuel duty, he could have risked choking any economic recovery as it would have led to increased costs for consumers and businesses.”
Measures in the Budget to continue support for businesses as the UK recovers from the Coronavirus pandemic were welcomed by the Association of Convenience Stores.
Headline measures include:
- 100% business rate relief will be extended for three months to the end of June, with a subsequent two thirds discount applying until the end of the 2021/22 financial year (subject to a maximum cap of £105,000 for businesses that have remained open;
- a ‘super deduction’ that means for the next two years, when companies invest they can reduce their tax bill by 130% of the cost of that investment;
- the furlough scheme will be extended until the end of September with employers asked to contribute 10% from July, and 20% from August.
ACS chief executive James Lowman said: “We strongly welcome the short-term measures the chancellor has announced to avoid a sudden shock in business rates increases for local shops. The upcoming review of business rates will be crucial in shaping our economic recovery from Covid-19, and we have long argued for the system to be designed to promote and reward investment. It is therefore encouraging to see the chancellor sharing our focus on promoting investment through his announcement of the new ‘super deduction’.”
Other measures announced in the Budget include:
- a £5bn grant scheme to help businesses hit hardest by the pandemic, with individual grants worth up to £18,000 for hospitality and up to £6,000 for non-essential businesses;
- alcohol duty rates to be frozen for the 2021/22 financial year;
- the reduced rate of VAT for food and non-alcoholic drinks sold for on-premises consumption and hot takeaway food is to be extended by six months to September 2021, with an interim rate of 12.5% for the following six months to April 2022;
- the VAT registration threshold to be frozen at £85,000 until 2026.
Madderson added: “The PRA was largely satisfied with the chancellor’s announcement on the extension of business rates relief.
“The three-month extension of 100% relief on business rates, followed by a two thirds discount for the last nine months of the 2021/2022 fiscal year will make a substantial difference to fuel retailers. This is particularly the case for those that have seen a sizeable reduction in revenue as fuel volumes have fallen by more than 20% over the past year.”
Although the chancellor has decided not to follow the decision in the Scottish parliament to extend the 100% business rates relief for the entire fiscal year, the PRA is looking ahead to the fundamental review in the autumn.
Madderson explained: “The new discounted rate from June onwards represents an excellent position to entrench the Uniform Business Rate (UBR) and create a more proportional and fairer system for forecourt businesses.”
He also welcomed the ‘super deduction’ and said: “This scheme provides the incentive during these difficult times for fuel retailers to invest in new automated car washing facilities, new food-to-go or shop renovations, and chilled display cabinets. It is also a helpful first step to investment in new electric vehicle charging points to meet the projected growth in demand for EVs.”
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