Interactive Investor

Budget 2020: Tax freeze on fuel, beer, wine, spirits and cider

11th March 2020 14:53

Stephen Little from interactive investor


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There was good news for motorists with the Government freezing fuel duty for the tenth year in a row

Fuel duty will remain frozen for the tenth year in a row, the Government has announced.

There had been reports that the Chancellor Rishi Sunak would raise the duty on petrol and diesel for the first time since 2011. The freeze will save motorists around £60 a year.

The freeze was imposed by the then-Chancellor George Osborne in 2011 and has remained at 58p per litre since then.

Sunak told the Commons: “I have heard representations that after nine years of being frozen, at a cost of £110 billion to the taxpayer, we can no longer afford to freeze fuel duty.

“I’m certainly mindful of the fiscal cost and the environmental impacts.

“But I’m taking considerable steps in this Budget to incentivise cleaner forms of transport. And many working people still rely on their cars. So, I’m pleased to announce today that, for another year, fuel duty will remain frozen.”

Freezing fuel duty costs the Treasury an estimated £800 million a year.

Earlier this week, a group of Conservative MPs wrote to the Chancellor, saying that the Government should not “balance environmentalism on the backs of working people”.

“They depend on their cars, vans and lorries to get about and run a small business. Every penny of a fuel price rise hits their financial security.”

Sunak also confirmed in the Budget that the Government will freeze duty rates on beer, spirits, wine and cider.

This will mean that a pint of beer is 1p cheaper than it would have been if it had risen with inflation.

In Britain, shoppers pay 54p per pint in tax for a pint of 5% strength lager.

Sunak said: "Today I can announce that, exceptionally, for this year, the business rates discount for pubs will not be £1,000 - it will be £5,000. And I’m also pleased to announce that the planned rise in beer duty will also be cancelled.

"And because of decisions I’ve taken elsewhere in the Budget, I am also freezing duties for cider and wine drinkers as well.

“For only the second time in almost 20 years that is every single one of our alcohol duties frozen.”


This article was originally published in our sister magazine Moneywise, which ceased publication in August 2020.

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