Published Monday 19th October 2020
Following the cancellation of the recent Autumn Budget it is worth revisiting the Spring 2020 Budget and looking at what effects this could have on transport operators.
It is arguable that due to the ongoing immediacy of the coronavirus pandemic and concerns over Brexit the full effects of the provision to increase duty on Gasoil to the same level of Diesel (a near 47ppl increase) from 1st April 2022 have not been properly digested. For example, it is estimated that this rise will increase costs on those in the cold chain sector by £100million per year, and over £1billion per year in the construction sector.
However, it was what was not in the budget that is more concerning for operators using transport fuels. As the economic toll of the pandemic rages on, the tax take from road going vehicles is down considerably compared to 2019. With the Treasury on the look for out for ways to reclaim lost revenue, and the Prime Minister’s new goal to “Build Back Greener” it would appear that motorists are becoming a soft target for tax increases. Since the start of September there have already been multiple reports that the Chancellor mulling anything from a 3 to 5ppl increase in transport fuel duty plus tying ongoing increases to RPI. Let us also not forget that these increases are net of VAT.
The only way for users of transport fuels and gasoil to mitigate these price increases is to ensure that the product they purchase is the best value for their business. At ERA we take a holistic approach to fuel procurement securing the best price for fuel whilst ensuring that any solution best meets the needs of our clients’ business.