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11:19 AM 21st November 2024
business
Opinion

Fuel Duty Revenues Fall Amidst Shift To Green Motoring

Image by Maria Maltseva from Pixabay
Image by Maria Maltseva from Pixabay
The Office of National Statistics has published the latest tax receipts which shows fuel duty revenues for April 2024 to October 2024 are £14.4bn, which is £0.1bn lower than the same period last year.

Sheena McGuinness, Head of Renewables and Cleantech at RSM UK, said:
“One of the few surprises in the recent Autumn Budget was that fuel duties were not increased. Currently fuel duties are the second highest indirect tax revenue generator for the UK tax purse, with the latest figures supporting the trend of this tax being on the decline. This has been the case over a number of years, in part due to the freeze on fuel duties.

“The recent decline is primarily driven by a shift away from traditional petrol and diesel vehicles to alternative forms of transport, including electric vehicles (EVs). However, given there was no update from government to deliver its pledge on rapidly expanding EV charging networks, and without the right infrastructure in place, there remains uncertainty over the future of the shift to greener motoring.

“Changes to fuel duties are required to address the declining tax revenues as a result of this tax stagnating in terms of level and falling as a result of declining use of petrol and diesel. Given the government’s stated commitment to net zero by 2030, a punitive tax, in the form of price per mile, for higher polluting vehicles, would have been an obvious strategy. Instead, we are seeing a move away from incentivising non carbon producing modes of transport, for example EV vans will soon be subject to the congestion charge, which until now they were exempt from.

“While government is yet to address what will be implemented to replace fuel duty in the longer term, the corporation tax roadmap does provide the energy sector with confidence and more certainty, encouraging investment, supporting innovation, and maintaining competitive rates.”