Fuels: Excise Duties and VAT

Treasury written question – answered on 15th July 2022.

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Photo of Valerie Vaz Valerie Vaz Labour, Walsall South

To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of (a) lowering the rate of VAT on motor fuel for low paid workers and (b) abolishing fuel duty.

Photo of Michelle Donelan Michelle Donelan Conservative, Chippenham

To ask the Chancellor of the Exchequer, what recent assessment he has made of the potential merits of (a) reducing fuel duty and (b) cutting the rate of VAT on petrol and diesel.

Photo of Alan Mak Alan Mak The Exchequer Secretary

The temporary 5p cut to duty on petrol and diesel represents a £2.4 billion tax cut in 2022-23, to help consumers with high fuel prices.

VAT is a broad-based tax on consumption and the 20 per cent standard rate applies to most goods and services. It would cost over £6 billion to cut VAT on road fuel from 20% to 5%.

The Government keeps all taxes under review.

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