Thursday, January 27, 2011

Fuel Duty

Can't seem to post a comment over at the WFA so before I lose it here's my response -

NeilHar -
Do you know, on the telly last night, Phillip Hammond said, "That the cost of petrol IS a problem".

Erm, no it isn't. The cost of the duty on petrol is The problem, and then VAT is added to the duty too. Get a grip Government. When no one can afford the petrol your economy will crash. Again.

FlipC -
Doubly stupid when you consider that it's Value-Added Tax, that is a tax on the value added by that stage and is supposed to avoid double-taxation. This means that VAT should be added prior to the duty

The interesting thing is that if you look at the Hydrocarbon Oil Duties Act 1979 you get

"produced in the United Kingdom and delivered for home use from a refinery or from other premises used for the production of hydrocarbon oil or from any bonded storage for hydrocarbon oil, not being hydrocarbon oil chargeable with duty..."

The key there is "home use". Strictly speaking no duty exists until it goes from the station into my car - that's it being "delivered". So I see no legal restriction as to why duty cannot be charged after VAT is applied.

To space it out -

The fuel company offers petrol at a price inc VAT
I accept
They deliver it to me and charge the duty.

Seems wholly consistent with how the law is worded.