VAT cut on petrol

Graywisdom

Chancellor Sunak has stated that Government Finances are in a worst state that at the time of the start of the pandemic.
This seems to be why he is unwilling to lower the VAT on petrol/diesel. However this is the same Government Department
which has recently given BILLIONS more to the HS2 project (given not loaned). One reason given is that the project will be
an advantage to rail users. Well, Mr Sunak what would be an advantage to everyone - whether vehicle owners or not - would be a cut
in VAT on fuel. He must be laughing his head off with the amount of petron/diesel VAT that is flowing into his coffers.

motorguy

Graywisdom said:

Chancellor Sunak has stated that Government Finances are in a worst state that at the time of the start of the pandemic.
This seems to be why he is unwilling to lower the VAT on petrol/diesel. However this is the same Government Department
which has recently given BILLIONS more to the HS2 project (given not loaned). One reason given is that the project will be
an advantage to rail users. Well, Mr Sunak what would be an advantage to everyone - whether vehicle owners or not - would be a cut
in VAT on fuel. He must be laughing his head off with the amount of petron/diesel VAT that is flowing into his coffers.

The countrys finances are in tatters because of the reaction to COVID.  

Ireland recently announced they were cutting duty on petrol and diesel and by the time it was introduced, the forecourts had - somewhat coincidentally - upped their prices by the same amount anyway.

Frankly i'm not seeing too many people reducing their car usage to "essential only".  Towns still seem full of cars and on the road we live on theres just as many cars zooming past the door. 

If everyone did reduce their usage, that would vastly reduce the UKs requirement and help get prices down via lower demand, which would help people who need / have no alternative but to use their cars.

Grumpy_chap

Graywisdom said:

Chancellor Sunak has stated that Government Finances are in a worst state that at the time of the start of the pandemic.
This seems to be why he is unwilling to lower the VAT on petrol/diesel. However this is the same Government Department
which has recently given BILLIONS more to the HS2 project (given not loaned). One reason given is that the project will be
an advantage to rail users. Well, Mr Sunak what would be an advantage to everyone - whether vehicle owners or not - would be a cut
in VAT on fuel. He must be laughing his head off with the amount of petron/diesel VAT that is flowing into his coffers.

There is a large difference between the rate of tax levied and the spend on capital investment.

The tax levied is a form of income for the Government.

The spend on capital investment is intended to yield returns in the long term through increased national productivity.  Part of the decision in making capital investment is the short term benefit if job creation versus unemployment.  In the case of the specific capital investment project you cite, the decisions to construct HS2 were made many years ago and the Government of today is virtually bound to carry on as the expenditure to date is now so far along the track that it would be too great an amount to scrap as sunk money.

You do not explain how it would be an advantage to everyone - whether vehicle owners or not - to cut VAT on fuel.  It is not clear to me that everyone would gain from that move.

Your opening statement is an obvious one - during the pandemic, Government revenue has reduced and Government expenditure has increased so the outcome cannot be anything other than Government Finances in a worst state than at the start of the pandemic.  It was clear throughout that such measures as were taken would result in taxes being higher than otherwise once the pandemic expenditure rescinded.

iwb100

Grumpy_chap said:

Graywisdom said:

Chancellor Sunak has stated that Government Finances are in a worst state that at the time of the start of the pandemic.
This seems to be why he is unwilling to lower the VAT on petrol/diesel. However this is the same Government Department
which has recently given BILLIONS more to the HS2 project (given not loaned). One reason given is that the project will be
an advantage to rail users. Well, Mr Sunak what would be an advantage to everyone - whether vehicle owners or not - would be a cut
in VAT on fuel. He must be laughing his head off with the amount of petron/diesel VAT that is flowing into his coffers.

There is a large difference between the rate of tax levied and the spend on capital investment.

The tax levied is a form of income for the Government.

The spend on capital investment is intended to yield returns in the long term through increased national productivity.  Part of the decision in making capital investment is the short term benefit if job creation versus unemployment.  In the case of the specific capital investment project you cite, the decisions to construct HS2 were made many years ago and the Government of today is virtually bound to carry on as the expenditure to date is now so far along the track that it would be too great an amount to scrap as sunk money.

You do not explain how it would be an advantage to everyone - whether vehicle owners or not - to cut VAT on fuel.  It is not clear to me that everyone would gain from that move.

Your opening statement is an obvious one - during the pandemic, Government revenue has reduced and Government expenditure has increased so the outcome cannot be anything other than Government Finances in a worst state than at the start of the pandemic.  It was clear throughout that such measures as were taken would result in taxes being higher than otherwise once the pandemic expenditure rescinded.

I suspect the benefit would be lower cost of goods and services. Or theoretically at least.

motorguy

iwb100 said:

Grumpy_chap said:

Graywisdom said:

Chancellor Sunak has stated that Government Finances are in a worst state that at the time of the start of the pandemic.
This seems to be why he is unwilling to lower the VAT on petrol/diesel. However this is the same Government Department
which has recently given BILLIONS more to the HS2 project (given not loaned). One reason given is that the project will be
an advantage to rail users. Well, Mr Sunak what would be an advantage to everyone - whether vehicle owners or not - would be a cut
in VAT on fuel. He must be laughing his head off with the amount of petron/diesel VAT that is flowing into his coffers.

There is a large difference between the rate of tax levied and the spend on capital investment.

The tax levied is a form of income for the Government.

The spend on capital investment is intended to yield returns in the long term through increased national productivity.  Part of the decision in making capital investment is the short term benefit if job creation versus unemployment.  In the case of the specific capital investment project you cite, the decisions to construct HS2 were made many years ago and the Government of today is virtually bound to carry on as the expenditure to date is now so far along the track that it would be too great an amount to scrap as sunk money.

You do not explain how it would be an advantage to everyone - whether vehicle owners or not - to cut VAT on fuel.  It is not clear to me that everyone would gain from that move.

Your opening statement is an obvious one - during the pandemic, Government revenue has reduced and Government expenditure has increased so the outcome cannot be anything other than Government Finances in a worst state than at the start of the pandemic.  It was clear throughout that such measures as were taken would result in taxes being higher than otherwise once the pandemic expenditure rescinded.

I suspect the benefit would be lower cost of goods and services. Or theoretically at least.

Most businesses will be VAT registered and thus will claim the VAT back anyway, so it would be a moot point removing it.

Flight3287462

It's called demand destruction.  Change your ways or pay the price.

On top of that the government need every penny it can get at the moment.  And if he was to do anything it would be on household energy.