Petrol / Diesel price increases

JustAnotherSaver

Hey at least they knocked 5p off the duty & posed for pictures at filling stations filling up a Kia.

Ergates

diystarter7 said:

It's a con/profiteering and good as price fixing.
I can manage and drive a lot, lot less now as left work and do bits from home but those needing to use their car and no other option are getting hammered.

Those running the country could easily reduce the tax burden by 40% from 45% to to about 25%

Profiteering?  You do understand what tax is for, right?

They *could* reduce the tax on fuel, but that would leave a large hole in the budget.  How do you suggest that hole could be filled?  

ZahraM5

facade said:

Brexit was years ago.

So was covid.

Everything is now because of The War.

Hope everything will turn back to normal soon prices are getting so high.

ontheroad1970

Ergates said:

diystarter7 said:

It's a con/profiteering and good as price fixing.
I can manage and drive a lot, lot less now as left work and do bits from home but those needing to use their car and no other option are getting hammered.

Those running the country could easily reduce the tax burden by 40% from 45% to to about 25%

Profiteering?  You do understand what tax is for, right?

They *could* reduce the tax on fuel, but that would leave a large hole in the budget.  How do you suggest that hole could be filled?  

Planting money trees using unicorn poo as fertiliser, presumably.  I'm no supporter of the Government and the lying Bar Steward that is at the top of the tree, but a 40p in the pound reduction would leave a gap that would have to filled from somewhere.  Perhaps diystarter7 could make an equitable suggestion.

Bigphil1474

Ergates - The VAT rate is a % of fuel price, so the government's revenue from tax on fuel has gone up even though fuel duty has remained the same (gone down in theory).

In December 2021 I paid £1.439 per litre unleaded, 16.67% was VAT = 24p per litre.
In June 2022 I paid £1.839 per litre, 16.67% was VAT = 30.6p per litre

That's a 25% increase in VAT revenue. The government could reduce the VAT rate so their revenue is more like it was last year which would reduce the pump price and all the knock on benefits that go with that (lower food costs, lower costs of goods in general). Whilst tax rate's haven't changed, the amount of VAT has.

So, reducing VAT wouldn't leave a large hole in the budget, it would just be the same sized hole it was 6/12 months ago. The main problem is still the weak £ though. It was $1.42 to the £ in May last year, currently it's around $1.23 to the £ though does seem to be picking up.

Ergates

Bigphil1474 said:

Ergates - The VAT rate is a % of fuel price, so the government's revenue from tax on fuel has gone up even though fuel duty has remained the same (gone down in theory).

In December 2021 I paid £1.439 per litre unleaded, 16.67% was VAT = 24p per litre.
In June 2022 I paid £1.839 per litre, 16.67% was VAT = 30.6p per litre

That's a 25% increase in VAT revenue. The government could reduce the VAT rate so their revenue is more like it was last year which would reduce the pump price and all the knock on benefits that go with that (lower food costs, lower costs of goods in general). Whilst tax rate's haven't changed, the amount of VAT has.

So, reducing VAT wouldn't leave a large hole in the budget, it would just be the same sized hole it was 6/12 months ago. The main problem is still the weak £ though. It was $1.42 to the £ in May last year, currently it's around $1.23 to the £ though does seem to be picking up.

A reduction in tax by 4p per litre wouldn't leave a large hole - but that isn't what was being advocated.   Also, doesn't change the fact that tax on fuel is not, by definition, "profiteering".

Grumpy_chap

Bigphil1474 said:

The government could reduce the VAT rate so their revenue is more like it was last year which would reduce the pump price 

Would it? 
Or would the petrol producers / retailers then simply bag the saving?  That would be profiteering.

Bigphil1474 said:

The government could reduce the VAT rate ... which would reduce the pump price and all the knock on benefits that go with that (lower food costs, lower costs of goods in general). 

Would it?
AIUI, the business paying the higher VAT will simply reclaim that as input-VAT and reduce the amount of output-VAT they then pay to HMRC.  It is the pre-VAT rate that impacts the costs of other items.