Is the duty on petrol an amount or a percentage? - HotUKDeals
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Is the duty on petrol an amount or a percentage?

csiman Avatar
banned8y, 6m agoPosted 8 years, 6 months ago
I know petrol has duty & vat added to it but was wondering if the duty element is a percentage or an amount.

E.g

say petrol cost £1.175 per litre which is approximately = (32p raw material cost + duty of 68p) + VAT of 17.5% (17.5p)

Is the 68p calculated as a fixed amount or is it a percentage of the retailers charge?

I'm confused by the government when they say they will be putting 2p on a gallon. Does this mean 2p duty plus a further 17.5% of this or is the 2p duty calculated using a government set percentage levied on the raw material?

I'm intrigued as to how much effect oil going up to an all-time high really has at the pumps compared to low duty economies like the USA.
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csiman Avatar
banned8y, 6m agoPosted 8 years, 6 months ago
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#1
theres fuel duty which i sa set amount i think, i posted a link the other day, ill dig it out
#2
is this any help?
#3
I think it's done on percentage so the higher the price the more revenue for Mr Brown..

I think THIS site explains it..
#4
Off the BBc website...



Thursday, 21 September, 2000, 09:54 GMT 10:54 UK
UK fuel tax: The facts


The price of fuel in the UK is a complicated business and it changes month to month as the cost of crude oil rises and falls with international demand.
British drivers also pay two taxes on the petrol they buy at the pump: Fuel Duty and VAT. Of these, fuel duty remains by far the most significant - and remains the most controversial.

Fuel Duty

If a litre of unleaded petrol costs 85p, 21.7p will be the production costs and profit, around 51p will be duty and 12.5p will be VAT on top of all that.

According to figures released with the 2000 Budget, the Government forecasts that fuel duties will continue to rise rapidly from a £21.6bn in the 1998-99 financial year to £23.3bn by the end of the 2000-01 financial year.

It's a lot of tax, but the Institute of Fiscal Studies, an independent think tank, says that the large rises in fuel duty began as far back as 1979.

Fuel Escalator

The major change in petrol taxation came under the Conservatives in 1993 with the introduction of the Fuel Price Escalator.

The escalator was designed as a means both to raise money and discourage car use on environmental grounds.

At the time, British fuel was the third-cheapest in Europe. It is now the most expensive.

The annual fuel escalator was set in 1993 at 3% above the rate of inflation.

On its introduction it added three pence to a litre of fuel and raised the tax burden on unleaded petrol to 72.8% of the total cost.

When the Conservatives left office in 1997, the escalator was at 5% and had contributed a 11.1 pence rise to the cost of unleaded fuel. Tax as a proportion of total cost stood at 76.3%.

Labour's record

On taking office, the new chancellor Gordon Brown increased the fuel escalator further and put three pence onto a litre of petrol in his first Budget. That pushed taxes up to 81.5% of the total price of fuel.

While duty rose by two pence a litre as part of the 2000 Budget, Gordon Brown also scrapped the fuel price escalator, saying that future increases would be decided on the basis of the "due Budget process".

At the time, and perhaps rather ironically given current events, the AA said that it was the first budget in seven years in which "drivers can take some heart".

According to the Tories this isn't good enough.

They say that since Labour came to office, the petrol pump price of unleaded petrol has risen by around 71%.

And while there have been large jumps in the price of oil, the party blames what it says is Labour's 16p per litre rise in taxes.

Figures from the Institute of Fiscal Studies tell a slightly different story. The Conservative figure of 16p per litre is a combination of duty and VAT.

While the actual amount brought in by VAT rises with increases in fuel prices and duty, it is calculated at the same 17.5% level which the present government inherited from the Conservatives.

VAT campaigning

Fuel campaigners argue that VAT should only be calculated on the cost of the fuel rather than on the fuel and the duty together.

If VAT was not charged on the duty, the motorist would save around 8p per litre at September 2000 prices. None of the parties appear to support that move.

Leaving aside VAT, fuel duty increases under Labour amount to 12 pence per litre - just slightly more than the rise caused by the escalator under the Conservatives.

Because of the rise in world oil prices, the proportion of the total fuel cost that is tax has fallen from 85% (March 1998) to 72.3% today - still one of the highest levels in the world - something that ministers have sought to stress in interviews.

With the Tories pledging a three pence a litre cut should they come to power, the question is whether the Government should cut fuel duty - and whether the country can afford
banned#5
edna_clouds;2155296
Off the BBc website...



Thursday, 21 September, 2000, 09:54 GMT 10:54 UK
UK fuel tax: The facts


The price of fuel in the UK is a complicated business and it changes month to month as the cost of crude oil rises and falls with international demand.
British drivers also pay two taxes on the petrol they buy at the pump: Fuel Duty and VAT. Of these, fuel duty remains by far the most significant - and remains the most controversial.

Fuel Duty

If a litre of unleaded petrol costs 85p, 21.7p will be the production costs and profit, around 51p will be duty and 12.5p will be VAT on top of all that.

According to figures released with the 2000 Budget, the Government forecasts that fuel duties will continue to rise rapidly from a £21.6bn in the 1998-99 financial year to £23.3bn by the end of the 2000-01 financial year.

It's a lot of tax, but the Institute of Fiscal Studies, an independent think tank, says that the large rises in fuel duty began as far back as 1979.

Fuel Escalator

The major change in petrol taxation came under the Conservatives in 1993 with the introduction of the Fuel Price Escalator.

The escalator was designed as a means both to raise money and discourage car use on environmental grounds.

At the time, British fuel was the third-cheapest in Europe. It is now the most expensive.

The annual fuel escalator was set in 1993 at 3% above the rate of inflation.

On its introduction it added three pence to a litre of fuel and raised the tax burden on unleaded petrol to 72.8% of the total cost.

When the Conservatives left office in 1997, the escalator was at 5% and had contributed a 11.1 pence rise to the cost of unleaded fuel. Tax as a proportion of total cost stood at 76.3%.

Labour's record

On taking office, the new chancellor Gordon Brown increased the fuel escalator further and put three pence onto a litre of petrol in his first Budget. That pushed taxes up to 81.5% of the total price of fuel.

While duty rose by two pence a litre as part of the 2000 Budget, Gordon Brown also scrapped the fuel price escalator, saying that future increases would be decided on the basis of the "due Budget process".

At the time, and perhaps rather ironically given current events, the AA said that it was the first budget in seven years in which "drivers can take some heart".

According to the Tories this isn't good enough.

They say that since Labour came to office, the petrol pump price of unleaded petrol has risen by around 71%.

And while there have been large jumps in the price of oil, the party blames what it says is Labour's 16p per litre rise in taxes.

Figures from the Institute of Fiscal Studies tell a slightly different story. The Conservative figure of 16p per litre is a combination of duty and VAT.

While the actual amount brought in by VAT rises with increases in fuel prices and duty, it is calculated at the same 17.5% level which the present government inherited from the Conservatives.

VAT campaigning

Fuel campaigners argue that VAT should only be calculated on the cost of the fuel rather than on the fuel and the duty together.

If VAT was not charged on the duty, the motorist would save around 8p per litre at September 2000 prices. None of the parties appear to support that move.

Leaving aside VAT, fuel duty increases under Labour amount to 12 pence per litre - just slightly more than the rise caused by the escalator under the Conservatives.

Because of the rise in world oil prices, the proportion of the total fuel cost that is tax has fallen from 85% (March 1998) to 72.3% today - still one of the highest levels in the world - something that ministers have sought to stress in interviews.

With the Tories pledging a three pence a litre cut should they come to power, the question is whether the Government should cut fuel duty - and whether the country can afford

Thanks all. From this line I can deduce that the fuel duty is an actual amount rather than a percentage:-

Because of the rise in world oil prices, the proportion of the total fuel cost that is tax has fallen from 85% (March 1998) to 72.3% today

Just imagine how bad it would be if the fuel duty was a percentage of the actual fuel cost in raw materials.
#6
As the Revenue & Customs document shows, the fuel duty is an absolute amount not a percentage. Interestingly enough, according to this document, the Unleaded Fuel duty came DOWN on 1st April 2008 by 3.3p...now I did not know that.

By the way Edna, the higher the price the more goes to the petrol companies. The Government get the additional revenue from the VAT and as far as I know, it isn'ts Gordon Brown's money it is ours.
banned#7
frogman;2155338
As the Revenue & Customs document shows, the fuel duty is an absolute amount not a percentage. Interestingly enough, according to this document, the Unleaded Fuel duty came DOWN on 1st April 2008 by 3.3p...now I did not know that.

By the way Edna, the higher the price the more goes to the petrol companies. The Government get the additional revenue from the VAT and as far as I know, it isn'ts Gordon Brown's money it is ours.

So why do people always moan that higher oil prices mean more money for the government? is it solely down to VAT and not on the sales of Brent crude?
#8
Yes and the mis-placed perception that the Government is responsible for everything that is wrong in our lives. The real culprits are the speculators in the City who have been driving up the cost of oil, wheat, sugar, rice, etc. just to make a very fast buck. And guess what, just as they suck in all the losers laggards, the bubble will burst (hopefully soon). But the damage is done...it is the vulnerable in society who pay for this greed. The problem with free markets in an unregulated market is that it can be manipulated...but not by the Government.
#9
The fuel duty is non of the above _

It all started with Dick Turpin and was known then as Highway Robbery!

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