Contact: Jamie Harley
Deloitte
Public Relations
+44 20 7303 5037
Commenting on the 'green tax' measures announced by the Chancellor today, Bill Dodwell, head of tax policy at Deloitte, said:
"The UK has low environmental taxes, which make up only 7.4% of total tax, at £36 billion. The major part - 92% - comes from fuel duty, vehicle excise duty and VAT on fuel.
"The increase announced today of 1.25 p per litre on Petrol duty (and the equivalent for diesel) will cost a motorist travelling 10,000 miles just £23 a year. At this level, it is likely to simply represent an additional cost for motorists, including business, rather than leading to a reduction in mileage.
"Other environmental taxes (air passenger duty, climate change levy, aggregates duty and landfill tax) currently raise £2.8 billion, with the largest amount being £1 billion from air passenger duty. The increase announced today, which doubles the duty, again is unlikely to reduce the number of flights and will simply raise additional tax.
The new rates will be:
| UK and European Economic Area - standard class |
|
£10 (previously £5) |
| UK and European Economic Area - business class |
|
£20 (previously £10) |
| Other flights - standard class |
|
£40 (previously £20) |
| Other flights - business, first class |
|
£80 (previously £40) |
"Overall, small tax rises for consumers will be insufficient to lead to wholesale behavioural change," concludes Dodwell.
For further comment from Bill Dodwell please call our Pre-Budget Report press hotline: 020 7007 3333.
Visit our dedicated Pre-Budget Report website for expert commentary and analysis.
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