Car tax changes: Fuel duty increases ‘no big deal’ as costs rise by ‘negligible amount’

Martin Lewis gives money-saving advice on VED car tax

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Any fuel duty increase will see costs rise by a “negligible amount” which will still be easy for road users to manage. Mike Rutherford, spokesperson for AutoExpress, said any increase to pay off coronavirus debt levels would be a “tiny price to pay”.

In his online column for AutoExpress, he warned drivers should not be worried about the rumours of a possible fuel duty rise in the March budget.

He said: “Worried by predictions that Fuel Duty will rise in the Spring Budget? Don’t be.

“In the great scheme of things, minor price increases at the pumps from next month are no big deal.”

He added: “But put this still-unconfirmed increase in context by understanding that it will probably result in the weekly fuel bill for a typical private driver rising by a negligible amount.”

Mr Rutherford warns drivers could simply change their driving style to increase fuel efficiency or avoid driving during “energy-sapping rush hours” to help save fuel.

He added drivers would be travelling fewer miles in lockdown which will lead to decreased fuel expenditure.

Mr Rutherford said drivers could also switch their cars for something more fuel-efficient which could be far cheaper to run.

Chancellor Rishi Sunak is thought to be considering increasing fuel duty by up to 2p at the next Budget.

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This will increase fuel duty charges from their current 57.94p per litre for the first time since 2011 when the charge was frozen.

The Treasury has previously claimed freezing the fee has saved the average road users up to £1,200.

However, the Treasury may have lost up to £100billion as a result of introducing the scheme.

The Treasury is also trying to manage a £40blllion hole in public finances as a result of the switch to electric vehicles.

Electric car owners are exempt from Vehicle Excise Duty (VED) taxes and fuel duty as there are no such charges for using electric charging stations.

Rishi Sunak maintained the fuel duty freeze at the last budget after claiming drivers still rely on their cars.

However, ahead of the 2019 election, Boris Johnson said he had no intention of raising fuel duty at all.

FairFuelUK has previously campaigned on the dangers of introducing a new fuel duty charge.

A report from FairFuelUK and the CEBR found any rise in fuel duty would generate “extraordinarily little revenue”.

They warn it would create “economic damage” and could reduce employment by around 8,000 jobs.

They said a rise in fuel duty would hit the poorest 10 percent of the portion who spend twice as much on fuel as richer groups.

FairFuelUK founder, Howard Cox said the Government should be looking to “incentivise” and “not punish” drivers.

He said: “The way forward out of the huge economic quagmire is to incentivise not punish the very people who are at the heart of any commercial post-pandemic recovery.

“The CEBR have predicted that a rise in fuel duty would generate extraordinarily little revenue, but most certainly would risk jobs, hike inflation, and stagnate business investment with the poorest, catastrophically hit the hardest.”

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