Hydrocarbon oil duty
Hydrocarbon oil duty (also fuel duty and fuel tax) is fuel tax levied on some fuels used by road vehicles in the United Kingdom. Between 1993 and 1999 the Government's Fuel Price Escalator led to significant rises in the cost of fuel which led to fuel tax protests in 2000, 2005 and 2007. In May 2008, UK fuel tax rates were one of the highest in Europe. Some vehicles including local bus services, some farm and construction vehicles and aviation pay reduced or no fuel duty. With the exception of gas, rates don't vary by fuel type.
Contents |
[edit] Rates and receipts
The rates as of 23rd March 2011 are as follows:
| Fuel | rate | note |
|---|---|---|
| Petrol | £0.5795[1] | per litre |
| diesel | £0.5795[1] | per litre |
| biodiesel | £0.5795[1] | per litre |
| bioethanol | £0.5795[1] | per litre |
| Road fuel gas other than natural gas | £0.3304[1] | per kg |
| Natural gas used as road fuel (inc biogas) | £0.2615[1] | per kg |
VAT at the current rate is then added to the total price.[2]
The following table shows the retail price of petrol and diesel (pence per litre) for a selection of untaxed prices:
| Untaxed price | Retail price | Tax |
|---|---|---|
| 50 | 129.54 | 61.4% |
| 55 | 135.54 | 59.4% |
| 60 | 141.54 | 57.6% |
The government revenue from Fuel Duty was £25.894 billion in 2009, with a further £3.884 billion being raised from the VAT on the duty.[3]
[edit] Exceptions
[edit] Aviation
Jet Fuel (not AVGAS) is exempt from fuel duty and value added tax (VAT) due to the Convention on International Civil Aviation, which came into effect in 1947.[4]
[edit] Buses
The Bus Service Operators Grant provides a fuel duty rebate to local bus service operators. As of April 2010 the rebate was £0.43 for diesel, £0.2360 for road fuel gas other than natural gas and 100% for biodiesel and bioethanol. Additional rebates are available for increasing fuel efficiency, low carbon emission vehicles and equipping vehicles with Smartcards and GPS tracking equipment.[5]
[edit] Coaches
Coaches, including UK express coach services pay taxation as per other general motorists. A proposal that long-distance scheduled coach services would receive the rebate in return for offering half-price fares to older and disabled passengers was considered by the government in 2001.[6]
[edit] Construction and farm vehicles
Registered construction and farm vehicles 'Red diesel' which includes a fuel dye has a significantly reduced tax levy compared to normal road fuel. This can only be used in registered agricultural and construction vehicles including tractors, excavators, cranes and there are heavy fines for misuse.[7]
[edit] Trains
UK train operators do not receive a general fuel duty rebate,[8] though in 2006 the duty on biofuels was reduced from 53p to 8p to encourage the its introduction for train use.[9][dead link]
[edit] History
1909 saw the introduction of petrol duty in the UK, with the rate being set at 3d (£0.013) per UK gallon, bringing the price of a typical UK gallon to 1s 1½d (£0.056).
In 1919, after several years of steady petrol price rises, petrol duty was abolished and replaced by vehicle taxation, and the tax disc based on horsepower. Immediately after the tax was removed petrol was about 4s (£0.20) per UK gallon.
By 1928, after market reductions in the cost of a UK gallon of fuel to about 1s 2½d (£0.06), the Government decided to once again charge duty on fuel, the new rate was 4d (£0.017) per UK gallon - bringing the cost of a UK gallon of petrol to 1s 6¾d (£0.078).
Between 1993 and 1999 the Government's Fuel Price Escalator led to significant rises in the cost of fuel which led to fuel tax protests in 2000, 2005 and 2007.
In May 2008, UK fuel tax rates were one of the highest in Europe. The UK tax was £0.55 per litre for diesel and £0.52 for unleaded petrol, where the other countries' rates for diesel ranged from £0.19 per litre in Estonia and Lithuania to £0.37 per litre in Germany, and for petrol from £0.23 per litre in Estonia and Lithuania to £0.54 per litre in the Netherlands.[10]
[edit] See also
- Fuel tax for international comparisons.
- Road Pricing
[edit] References
- ^ a b c d e f "Hydrocarbon Oils: Duty Rates". HMRC. http://www.hmrc.gov.uk/budget2011/tiin6330.pdf.
- ^ Leroux, Marcus (2008-11-24). "Fury as fuel duty lifted 2p to offset VAT cut". London: Times Newspapers. http://business.timesonline.co.uk/tol/business/economics/pbr/article5225998.ece. Retrieved 2009-04-03.
- ^ United Kingdom National Accounts: The Blue Book (Report). Office for National Statistics. 2010.
- ^ "UK taxpayers 'subsidise' airlines by 300 each every year". Friends of the Earth. http://www.foe.co.uk/resource/press_releases/uk_taxpayers_subsidise_air_10032006.html.
- ^ "Bus Service Operators Grant (BSOG) rates in England". Department for Transport. http://www.dft.gov.uk/pgr/regional/buses/busgrants/bsog/rates.pdf.
- ^ "II. Trends in the bus industry". Hansard. http://www.parliament.the-stationery-office.co.uk/pa/cm200102/cmselect/cmtlgr/828/82804.htm.
- ^ "Thousands using illegal car fuel". BBC News. 2007-11-03. http://news.bbc.co.uk/1/hi/uk/7076799.stm.
- ^ "Public Transport Subsidies". Hansard. http://www.parliament.the-stationery-office.co.uk/pa/cm200102/cmhansrd/vo011106/text/11106w06.htm#11106w06.html_sbhd10.
- ^ "unknown". http://www.atoc-comms.org/dynamic/atocpress-story.php?atoc=997790.
- ^ Robert Winnett (2008-05-10). "UK drivers pay highest fuel taxes in Europe". The Daily Telegraph (London: Telegraph Media Group). http://www.telegraph.co.uk/news/newstopics/fair_deal_for_drivers/1942640/UK-drivers-pay-highest-fuel-taxes-in-Europe.html. Retrieved 2008-05-14.
[edit] External links
- Hydrocarbon Oils Duty Rates UK HM Revenue & Customs website
- Hydrocarbon Oils: Customs Duty UK HM Revenue & Customs website
- 2011 Hydrocarbon Oil Duty Rates UK HM Revenue & Customs website
