The price of a litre of petrol and diesel includes 53p per litre in fuel duty. This raises a LOT of money. The Office of Budget Responsibility forecasts that in 2022-3, motorists will pay £26.2 billion in fuel duties alone (equal to £930 per household). But that is not the end of it: the Government double taxes fuel at the pumps because by adding 20% to the overall cost per litre, it means that 11p in every litre sold is paid in VAT on the Government's own 53p fuel duty. That's right, you are taxed on the tax you already pay.
This creates a perverse situation where the higher the price of fuel gets, the more tax the Chancellor gets. It effectively removes any incentive for the Government to do all it can to reduce fuel prices - such by cutting its own fuel duty.
It also reduces transparency by making it harder to know precisely how much tax motorists are charged for filling their cars.
The Government itself has accepted the principle that double taxation is unfair. For example, the UK has agreements in place with some other countries to enable British nationals who live abroad not to be taxed twice on their income. In other words, the principle against double taxation is applied more effectively to Brits living abroad (who are likely wealthier) than it is to British motorists (and voters) at home.
This would be bad enough in normal times, but with inflation outpacing wages, and low income workers reporting that it's often too expensive to afford fuel to get to work, this is the moment to scrap the VAT charged on top of fuel duty. With one swipe of the pen, the Government could make fuel 11p per litre cheaper and correct this unfairness.
Join our campaign by signing the petition and help fund our lobbying to ditch the double taxation!