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Association of British Drivers, 13 th September 2005
In the run-up to another wave of protests over fuel prices, the ABD today pointed out a simple measure the Government can take to reduce pump prices and avoid the disruption of further blockades: cease the outrageous practice of charging a tax on a tax.
The retail price charged to motorists for fuel is arrived at by taking the cost of the fuel itself, adding fuel duty - and then adding VAT to both the fuel cost and duty amount. This means that one tax, VAT, is charged on another tax, fuel duty.
ABD fuel tax spokesman Tony Vickers pointed out: "8.24p in every litre is VAT paid on fuel tax - a tax on a tax. The government could reduce pump prices by 8.24p per litre simply by ending this practice."
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