The Times
August 31, 2009

in Brief:


Motorists face more pain from tomorrow when fuel duty is increased by 2p, the first stage in the removal of government assistance to help families and businesses through the recession.

The Treasury is planning five tax rises worth more than £10 billion between now and the general election. It is also planning to end temporary schemes to ease the downturn, such as car scrappage.

Opposition politicians, business groups and economists say that this could put the fragile economic recovery in jeopardy by discouraging spending. Mervyn King, the Governor of the Bank of England, has indicated that he believes the economy still needs significant support.

Motorists will be the first affected, with the rise in fuel duty from tomorrow despite petrol prices of 105p a litre. This measure was delayed from last year because of high oil prices. It will generate £1.3 million a day in additional revenue for the Treasury, according to the AA, and means that the taxman takes 65 per cent of the price of a litre of petrol.

A spokesman for the AA said: “Fuel is the biggest item on the family shopping list. Either they will have to siphon off other parts of their budget or they will have to reduce their petrol consumption. Neither is good for the prospects of recovery.”

other key points:

The next tax increase is on January 1 when the 15 per cent VAT rate is due to return to 17.5 per cent.

Also returning on January 1 will be the imposition of stamp duty on houses costing between £125,000 and £175,000,which had been suspended to jump-start the property market.

The introduction of the 50 per cent rate of tax on earnings of more than £150,000 will be introduced on April 1, as well as a restriction of tax relief to 20 per cent for people on salaries above £150,000.

Business rate relief and the first-year capital allowance increase to 40 per cent will also both end in April next year. A scheme to allow businesses to write off losses of up to £50,000 against profits made in the preceding three years will close at the end of next year.

Full article: http://business.timesonline.co.uk/tol/business/economics/article6815398.ece



Fluff........

The continued rise in fuel duty is the quickest yet most diabolical tax their is!! the cost of any rise will instantly effect all goods and services and put extra pressure on consumers pockets.
How on earth do they expect to turn around the economy by hitting the one area that would be like a cancer, to companies that are reducing outgoings will seek cheaper cuts! leading to more unemployment and more GDP shrinkage....nice one