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Red Diesel Tax

how much is red dieselSince the year 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 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 the air pollution caused from 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.

How Much Is Red Diesel Tax In Other Countries?

The income the Government make from fuel and vehicle tax has left them with £30 billion more per year than they spend on making improvements to the roads. 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, 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.

White and red diesel have different prices, however it seems that the Government are 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, are 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.

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