Menu

Login to access your account

Sat, 28 November 2020

Personalise Your Politics

Subscribe now
The House Live All
We must design infrastructure that will benefit us all economically, environmentally and socially Partner content
By Jacobs
Economy
Economy
Economy
Economy
For the sake of British Business we must maintain our aid budget - here's why Partner content
By Coalition for Global Prosperity
Economy
Press releases
By Hft

Philip Hammond considers risky course with VAT and diesel tax shake-up

Philip Hammond considers risky course with VAT and diesel tax shake-up
2 min read

Philip Hammond is sounding out the implications of a Budget revamp of VAT for small firms that could raise up to £2bn a year for the Treasury.


The Chancellor is thought to be seeking means to lower the £85,000 turnover threshold to VAT toward international standards, like the European Union average of £20,000. 

But the move will risk the ire of small businesses – and many of the same individuals who were angered by his attempt to increase national insurance contributions for the self-employed in his first Budget.

Mr Hammond was then forced into an embarrassing reversal of the policy.

The Office of Tax Simplification this month reported that “bunching” by companies claiming turnover just below the current threshold was causing “a distortionary impact on business growth and activity”.

The Chancellor is also mulling tax changes to disincentivise emissions from diesel cars. 

A number of options are on the table, including a fuel duty increase and a change to vehicle excise duty on existing diesel cars – the tax on new cars is already set to increase.

He may also roll out a cut in the duty on petrol cars to ameliorate the backlash to any increase on diesel. 

Edmund King, the president of the AA said: “It is ridiculous to further demonise diesel via differential taxes when drivers are already voting with their wheels. Some 41 per cent of AA members own diesels but that drops ... to 16 per cent when drivers are asked what fuel their next car will run on."

RAC chief engineer David Bizley dubbed the plan “a terrible, misjudged knee-jerk reaction”. 

 

Read the most recent article written by Richard Welbirg - Theresa May acquires Article 50 portrait

Categories

Economy Transport
Partner Content
Inclusive Capitalism

The next decade holds big challenges and it rarely has it been so important to show that capitalism and social progress aren’t opposing forces. Quite the opposite. All it takes is a longer-term view, a more inclusive attitude and for everyone to take that first step.

Find out more

Podcast
Engineering a Better World

Can technology deliver a better society? In a new podcast series from the heart of Westminster, The House magazine and the IET discuss with parliamentarians and industry experts how technology and engineering can provide policy solutions to our changing world.

New episode - Listen now