Calls Made For Chancellor To Axe Fuel Tax Plans

by Amanda Banks, Tax-News.com, London

21 January 2008

Representatives from several hundred businesses have called upon the UK Chancellor to re-think plans for another 2p per litre fuel increase later this year.

If the Chancellor goes ahead with his proposal - due to take effect in April - it will send fuel prices soaring further, and could end up costing the haulage industry up to GBP170m.

In a letter to Alistair Darling, the business men and women outlined their concerns, stating that competing with European rivals is becoming increasingly difficult for British hauliers due to increases in fuel taxes.

The letter stated, according to reports, that:

"The new rise will only compound the problems, with many smaller hauliers likely to be the worst hit as they will find it difficult to pass on the extra cost to customers."

It continued: "We are alarmed by the signals that the government appears to be sending to such a crucial industry at a time when the economy appears to be stalling."

The British Chamber of Commerce has stepped in to back the claims made in the letter, further urging the Chancellor to reconsider.

"This is yet another tax on business which further erodes our international competitiveness," argued David Frost, director general of the BCC.

However, the Treasury has reportedly defended the Chancellor's proposals, claiming that the increase has been budgeted in such a way that it will provide a greater sense of "certainty" for business.

A spokesman for the Treasury added, according to the BBC: "After these changes, by 2010 main fuel duty rates will be 11% lower in real terms than they were in 1999."

"The changes were made alongside reforms to vehicle excise duty that cut rates for less polluting vehicles and a number of measures to support hauliers which they have welcomed."

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