Permanent 2p duty increase in fuel tax introduced...
Discussion
They give with one hand and take away with the other. Inevitable I suppose, but yet the "commentators" on the news last night were saying that the VAT cut will help "on things like a tank of fuel"...
http://www.petrolprices.com/blog/fuel-prices-to-ri...
http://www.petrolprices.com/blog/fuel-prices-to-ri...
The government only wanted to fool the er foolish into thinking the budget would in some way benefit us. Of course, reducing tax on one of the highest cost and most regular expenditure items, fuel, would mean perhaps some genuine benefit. Obviously, this couldn't be allowed to happen.
Numbers may be a bit off but here goes
Unleaded at 90.9p a litre (local garage this morning)
So before vat thats 77.3617021p per litre
remove the duty at 50.35p gives 27.0117021p per litre
Now add duty at 52.35p per litre gives 79.3617021p per litre
Now add the new vat rate of 15% gives 91.2659574p
Rounding up thats a rise of 0.4p per litre.
Now pretty much everything gets delivered by vehicles, so will that additional cost be absorbed by the hauliers? Let me think on that....
Also what are the chances of the 2p rise being revoked when fuel prices rise again? Especially as the currency is getting weaker.
Unleaded at 90.9p a litre (local garage this morning)
So before vat thats 77.3617021p per litre
remove the duty at 50.35p gives 27.0117021p per litre
Now add duty at 52.35p per litre gives 79.3617021p per litre
Now add the new vat rate of 15% gives 91.2659574p
Rounding up thats a rise of 0.4p per litre.
Now pretty much everything gets delivered by vehicles, so will that additional cost be absorbed by the hauliers? Let me think on that....
Also what are the chances of the 2p rise being revoked when fuel prices rise again? Especially as the currency is getting weaker.
bp1 said:
Numbers may be a bit off but here goes
Unleaded at 90.9p a litre (local garage this morning)
So before vat thats 77.3617021p per litre
remove the duty at 50.35p gives 27.0117021p per litre
Now add duty at 52.35p per litre gives 79.3617021p per litre
Now add the new vat rate of 15% gives 91.2659574p
Rounding up thats a rise of 0.4p per litre.
Now pretty much everything gets delivered by vehicles, so will that additional cost be absorbed by the hauliers? Let me think on that....
Also what are the chances of the 2p rise being revoked when fuel prices rise again? Especially as the currency is getting weaker.
Well summarised.Unleaded at 90.9p a litre (local garage this morning)
So before vat thats 77.3617021p per litre
remove the duty at 50.35p gives 27.0117021p per litre
Now add duty at 52.35p per litre gives 79.3617021p per litre
Now add the new vat rate of 15% gives 91.2659574p
Rounding up thats a rise of 0.4p per litre.
Now pretty much everything gets delivered by vehicles, so will that additional cost be absorbed by the hauliers? Let me think on that....
Also what are the chances of the 2p rise being revoked when fuel prices rise again? Especially as the currency is getting weaker.
Your closing point is correct. Of course the duty will not come off when the barrel price rises.
In addition, the reduction from 17.5% to 15% is being commentated as being temporary only, "for around a year", and therefore the 2.5% will quite soon be reapplied to the fuel and its duty.
People who believe that they will be better off from this temporary 2.5% reduction are kidding themselves
There will be very few items reduced in price with the reduction in VAT - something which is £9.99 will not got to £9.72. The price of new cars may be reduced slightly because it has a much bigger effect, but as Sterling is pretty low I expect most importers will leave the retail price as it is and use the reduced VAT to compensate for the exchange rate.
So, fuel stays almost exactly the same because of the increased duty. Many consumer goods will stay the same because they are priced at levels which sound and look right. Imported goods need to increase because of Sterling's weakness. That leaves the VAT on items bought by businesses where prices are typically quoted ex. VAT but they will almost all reclaim the VAT anyway. Total effect of the budget to consumers - nothing. Effect on all tax payers - a large debt to be repaid later.
Well done Gordon and Alistair
So, fuel stays almost exactly the same because of the increased duty. Many consumer goods will stay the same because they are priced at levels which sound and look right. Imported goods need to increase because of Sterling's weakness. That leaves the VAT on items bought by businesses where prices are typically quoted ex. VAT but they will almost all reclaim the VAT anyway. Total effect of the budget to consumers - nothing. Effect on all tax payers - a large debt to be repaid later.
Well done Gordon and Alistair
bp1 said:
Now pretty much everything gets delivered by vehicles, so will that additional cost be absorbed by the hauliers? Let me think on that....
Plus the hauliers can now only claim back 15% VAT, add that to the extra you mention and the haulage costs have increased significantly.Once again a New labour tax cut is, in fact a tax increase.....
Although I've been in the US for 7 years I still can't get used to the strange fact that the petrol prices here go up AND down according to oil prices. So now I am happy to have a new President and petrol back under $2 per US gallon for the premium stuff. So down to $45 to fill the Bentley. So I can out my foot down again.
Nolar Dog said:
andyps said:
There will be very few items reduced in price with the reduction in VAT...
Well my mobile phone and internet bills have come down so I am happy. 
Heard from a good source in the phone industry that Orange are 'removing' VAT from there bills, but the amounts stay the same (ie, a £15 contract (with current VAT) will remain £15) so they make a nice 2.5% profit from it when they handle the VAT side of things at there end...
PaulW21781 said:
Nolar Dog said:
andyps said:
There will be very few items reduced in price with the reduction in VAT...
Well my mobile phone and internet bills have come down so I am happy. Heard from a good source in the phone industry that Orange are 'removing' VAT from there bills, but the amounts stay the same (ie, a £15 contract (with current VAT) will remain £15) so they make a nice 2.5% profit from it when they handle the VAT side of things at there end...
There is no need to separate out the VAT although it should have the organisations VAT number on the invoice. Therefore a £35 per month tariff can stay a £35 per month tariff at retail price including VAT, the amount of it which is VAT will change, but the price remains the same.
Need to check what O2 are doing, but I suspect the VAT change will not be passed on.
Need to check what O2 are doing, but I suspect the VAT change will not be passed on.
PaulW21781 said:
Nolar Dog said:
andyps said:
There will be very few items reduced in price with the reduction in VAT...
Well my mobile phone and internet bills have come down so I am happy. Gassing Station | General Gassing [Archive] | Top of Page | What's New | My Stuff