Fleet News

Brown set to abandon plan for fuel duty rise

FLEETS were today expecting to be spared a rise in fuel duty as Chancellor of the Exchequer Gordon Brown delivers his pre-Budget report.

It is widely expected that the Chancellor will abandon a 1.92p per litre rise which had been due in last year’s Budget but was delayed because of higher world oil prices.

Such a move would mean fleets will have had a year free from duty rises although prices at the pump have increased due to other worldwide trends.

But Retail Motor Industry Federation (RMI) bosses believe the current fuel duty levels are already a ‘considerable burden’ on businesses and called for any rise to be scrapped.

Chief executive Matthew Carrington said: ‘Any increase in fuel duty impacts immediately on all businesses and the effect can stifle investment and lead to a loss of demand.’

He added that the current situation concerning duty levels for LPG had caused uncertainty in the market.

He said: ‘The most recent rise in tax on LPG led directly to a drop in residual values of LPG vehicles.

‘Such action is a direct disincentive to potential customers. It is notable that fleet buyers do not choose LPG vehicles because of the uncertainty of residual values of the vehicle.’ The Forum of Private Business, which represents the interests of small companies, said the Chancellor must abandon the deferred fuel duty rise if their members were to remain competitive.

In its submission to the Government, the Association of Car Fleet Operators called on the Government to give them at least four to six years’ notice of any benefit-in-kind tax changes so they could plan vehicle choice more effectively (Fleet NewsNet, November 25).

Currently, benefit-in-kind tax rates are known for a three-year period but the industry has dubbed this a ‘short-sighted approach’ and believes it is prompting an increasing number of drivers to opt out of traditional company car tax schemes and into cash-for-car schemes.

  • Updates on today’s pre-Budget report will be posted on www.fleetnewsnet.co.uk
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