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Spring Budget 2022: What does Rishi Sunak have in store for drivers?


Cash-strapped drivers are now paying £100 to fill in family car are ramping up pressure on Rishi Sunak to throw them a financial lifeline when the Prime Minister delivers his Budget report on Wednesday 23 March.

The record fuel prices following Russia’s invasion of Ukraine have come at a time when inflation is at a three-decade high and a planned price hike by National Insurance is imminent.

While many people struggle to afford a car, others – such as county nurses, who rely on their own cars to get to work – are having to reduce the mileage charges that users pay. employment offered.

So what options does Rishi Sunak have to ease the pain of drivers on March 23?

Fuel tax cuts

The government tax of 58p a liter has been frozen since 2011. Despite the freeze, which is estimated to have saved drivers £15 every time they fill up with gas, the tax still gives the government £27 billion UK every year, according to the RAC.

Calls for temporary tax cuts have come from all corners of the UK economy. They follow ‘crisis discounts’ that have been implemented or planned by countries including France, Sweden, the Netherlands and Germany.

Most recently, the Republic of Ireland cut fuel tax by the equivalent of 17p/litre on petrol and 12.5p on diesel, until the end of August.

Any cut would come at a huge cost to the economy. It is estimated that following Ireland’s example would cost the UK finances £3 billion. Yet almost that exact amount – £2.9 billion – is what an analysis gives Time shows that Rishi Sunak will earn more VAT from the record pump price.

Will the government act?

The most heard reason not to offer a temporary cut is volatile oil prices and with a barrel of crude now below $100 once again after hitting a 14-year high earlier this month, the Pump discounts will soon follow.

Reduced VAT rate

The second option to reduce pump prices is to cut the VAT rate. It is currently 20% and is payable on top of the oil price plus fuel tax, tax on tax as well. Many people across the country, including those in need, are calling for an immediate 5% reduction.

The RAC says motorists are paying 7p more VAT for every liter of petrol purchased than in 2019. In the year before that lockdown, the average cost of a liter was £1.25 for petrol and £1,500. £31 for diesel, while in recent days it has hit unprecedented highs of £1.63 and £1.73.

It is this galloping increase that has led to a reduction in VAT by HM Treasury, boosting sales by £10 billion/year by £2.9 billion. For that to happen, although demand needs to stay at 2019 levels, around 46 billion liters a year.

Another possible VAT cut is for electricity at public charging points, currently 20%. The Motor Manufacturers and Traders Association is calling for the same rate as the 5% change for domestic electricity.

Will the government act?

Opponents of a VAT cut say such a move is unlikely because once implemented, reinstating the tax rate in a six-month period would be problematic due to public outcry.

Increase mileage rate

The spike in pump prices is a particular problem for those who are paid a mileage rate to use their own car for work, including many who are doing vital work in the NHS.

The rate nurses are paid can vary but is generally up to 56p/mile for the first 3,500 miles and then 20p for each additional mile, a rate unchanged since July 2014.

In many cases, the cost exceeds the cost, district and community nurses are having to pay out of pocket to be able to continue the journey.

The Royal College of Nursing (RCN) has estimated nine out of 10 nurses have to pay salaries. “The nursing workforce traveling for nursing care cannot afford the NHS subsidies,” the RCN said, calling for an immediate supplemental payment and conducting a mileage rate review. .

Will the government act?

The RCN says that unless the Prime Minister takes action, patient care will suffer. Will that be enough for him to increase his mileage?

Expanding sponsorship of electric cars

Motor industry body SMMT is asking the Prime Minister to extend “critical” grants available to homeowners to install charging points, which will end in April. SMMT wants to see the show, along with a similar program for businesses, extended beyond 2025 “to ensure EV Absorption remains on track to meet the government’s net zero deadline. ”

Will the government act?

Install one charging points at home It’s a hidden cost when buying a new electric car – and with plug-in cars accounting for a quarter of all new car sales in February now wouldn’t be a good time to take the money. aid.

Check out the latest information about UK petrol and diesel prices with our guide…



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