Fuel duty revenue losses may have’significant implications’ for UK motorists.
When the sale of new petrol and diesel vehicles is banned from 2030, fuel duty losses could have “significant implications” for the government and drivers.
As part of the government’s net zero pledge, the sale of new gasoline and diesel vehicles will be prohibited beginning in 2030, with a hybrid ban following in 2035.
According to government estimates, there could be three million electric vehicles on the road by 2025, ten million by 2030, and twenty-five million by 2035.
This massive shift in car and driving habits would, of course, have a huge impact on the net zero goals, drastically lowering vehicle emissions.
However, it would have a significant impact on government revenue from fuel duties.
Fuel duty currently accounts for 40% of the total cost of a litre of unleaded petrol, which is currently around 57.95p.
A further 17 percent comes from VAT, which is charged at 24.27p per litre of unleaded, with the cost of a litre of diesel being roughly the same after VAT and fuel duty.
Liberty Charge’s CEO, Neil Isaacson, spoke about the future and what needs to be done to close the fuel duty gap.
“The meteoric rise in the popularity of electric vehicles will continue in 2022, driven by consumer demand, which is being aided by a rapidly expanding network of public electric vehicle charge points,” he told this website.
“In 2022, more electric and hybrid vehicles are likely to be sold in the UK than petrol and diesel vehicles for the first time ever.”
“However, HMRC faces significant consequences.”
“The loss of fuel duty will leave a hole in the government’s finances that must be filled.”
In the Autumn Budget, Chancellor of the Exchequer Rishi Sunak announced that a planned increase in fuel duty would be cancelled.
He praised the £8 billion in savings over the next five years.
Given the peak in gasoline and diesel prices last year, as well as rising household costs, many people were still critical of the move.
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“We have a number of progressive ideas that we would be happy to share with national government,” Mr Isaacson continued.
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