Im a proud member of the TransAction 2007
action group, that lobbys the government with regards fuel taxation in the interest of primarily hauliers and farmers, but also everyone in the country.
Anyway, after a recent discussion on the TransAction forums, someone bought some interesting details to light, and just wanted to gauge you're thoughts on this small matter, that may mean our prices are as much as 10p high than they legally should be:
If a litre of fuel costs £1.07p. This is how it breaks down.
50.35p is Fuel Duty
32.60p is Product
16.07p is VAT
8.88p is Retailer/Delivery
8.8p of the VAT is chargeable on the fuel duty, which is tax. This isnt a product, it is a tax. Only 7.9 of the VAT is actually on the product.
A member on TransAction raised this point, and I believe there may be some serious grounds for concern with regards it, and that we may be getting ripped off, even robbed, by our government.
How can it be legal to charge VAT (8.8p per litre) on fuel tax?
Isn't VAT a Value Added Tax? How does fuel tax 'add value' to fuel, meaning value to the purchaser, not the government? If it means add tax to the value of the product then it is still wrong - fuel tax is not a part of the 'product'.
By all means add VAT to the product + retail + delivery cost, but adding it to the fuel tax simply cannot be right as tax is not a 'product or service'.
I know the government do pretty much what they want to regardless of how legal/illegal it may be, however VAT rules are no imposed by the EU, so does anyone else know if this is legal? What are you're thoughts on this?
I think its a very valid point, and I think I will be looking into this further. I may even go so far as to contact Angela Eagle to see what response Labour will give to such a question.