Is Tax on Red Diesel Higher in the UK than in Other Countries?
Posted on 8th May 2019
We all know fuel duty on road fuels is high, but how about red diesel tax?
As any driver, who has been driving since the year 2000 or earlier will know, there was a time when fuels at the pump were actually a lot less than the £1+ we pay today. Of course, much of this will be down to the oil price increases, but an even larger chunk of the money we pay out at the pump is in tax which still accounts for much of the price of the fuel we buy, compared to countries such as the United States, which artificially keeps their fuels so much cheaper.
American farmers pay 5 times less than British farmers, while German and French farmers pay less than half the duty of red diesel in the UK. 42% of the price of fuel is tax, and when you take VAT into consideration that figure rises to 60%. Every other major economy in the world pays less tax on fuel than the UK.
Since 2000, red diesel tax in Britain has increased by almost 40%. No other country in the EU pays as much tax on red diesel as businesses and organisations in the United Kingdom.
Agricultural budgets are already strained, however, farmers are now paying 38% more for red diesel then they did this time three years ago. Other EU states are paying a lot less red diesel tax. Fuel that is used on roads and in farming differs in almost all countries, so the UK is not unique in that respect.
Oil spillages and air pollution caused by red diesel may give the Government an excuse to charge a high red diesel tax because they need to counterbalance this. However fuel ancillary products and carbon offset red diesel have been produced to fight this problem.
White and red diesel have different prices, however it seems that the Government is just using it as another source of income, which may undermine the reason for charging excessively different prices. If the improvements aren’t being made to the roads, is the Government justified in increasing the tax they charge on fuel?
The environmental and road costs associated with fuel duty should be fairly distributed in the cost of fuel and HMRC guidelines should state this.
There is little that any of us can do with regards to the amount of money we contribute to fuel duty when buying fuels. But here at Crown Oil, our buying power enables us to make savings at the point of purchase which then allows us to pass on these savings to you.
If you would like to see how much we could save your business when buying red diesel and other fuels and oils, give our friendly team a call today on 0845 313 0845 to discuss your requirements and to see how much we could save you.