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New research from car finance experts ChooseMyCar has shown driver back proposals to reduce VAT rates on petrol and diesel. The new research shows two thirds (69 percent) of UK drivers believe the Government should be dropping VAt rates to stabilise recent price hikes.
“Our research proves that the Government needs to take action now to ensure that spiralling fuel costs are mitigated by lower VAT.”
The Office for Budget Responsibility confirmed VAT is added on top of fuel duty on petrol and diesel.
They said: “VAT is applied after fuel duty.
“So, for example, the pump price of a litre of petrol currently reflects the pre-tax price plus 57.95p for fuel duty plus 20 per cent VAT on the pre-tax price and a further 11.59p for VAT at 20 per cent on fuel duty.”
The RAC said they “welcomed” the news, but have also called for VAT tax rates to also be cut.
RAC fuel spokesman Simon Williams said: “We’re disappointed he did not provide some respite for drivers at the pumps.
“As VAT is charged on the final cost at the pumps, a temporary cut in VAT to motor fuels would have benefitted drivers immediately at a time when filling up the car is hurting household budgets more than ever before as well as the wider economy as people will have less money to spend.”
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