HMRC have published the fuel duty receipts to April 2021. Not surprisingly, given the pandemic, it’s down year on year, but the amounts involved are eye watering.
If you look at just the fuel duty the country lost £6.64bn in 2020/21. Add in the related VAT and the real loss will be a smidge under £8bn.
To put that in content, company car tax for the whole of 2019/20 is estimated by HMRC at just £2.46bn (a record).
What’s potentially really interesting is the bars in green below, which are the latest estimate from the OBR on receipts for 2021 to 2024. Perhaps unsurprising that the amount rebounds, but up to just under £30bn (£36bn with VAT) by 2024? One wonders how this could be given the move we’re now seeing to EV and the sustained impact on mileage driven by those working more flexibly.
Is the OBR factoring in significant future hikes in Fuel Duty? These have been cancelled by successive Governments and may be politically difficult to resume.
We’ll post again with some more thoughts on the shift to EVs in coming years and what it means to fuel duty and other taxes.