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UK government freezes duty on LPG and raises diesel taxes

United Kingdom Chancellor Philip Hammond recently announced the government will end the fuel duty escalator for Liquefied Petroleum Gas (LPG). It will freeze the rate of duty on fuels for an eighth year in 2018-19, and will review whether the existing rates for alternatives to petrol and diesel are appropriate, ahead of decisions at Budget 2018. In the meantime, the LPG rate will be frozen in 2018-19.

“We welcome the Government’s review into the fuel duty treatment of alternative fuels and the announcement of a freeze of the fuel duty escalator for LPG,” said Gerry Keaney, chief executive of the British Vehicle Rental and Leasing Association (BVRLA). The decision is expected to support LPG Autogas use in the UK.

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Moreover, in support of the National Air Quality Plan published in July, the government will provide £220 million for a new Clean Air Fund, allowing local authorities in England with the most challenging pollution problems to help individuals and businesses adapt as measures to improve air quality are implemented. This will be paid for by a Vehicle Excise Duty (VED) supplement, better known as the car tax, that will apply to new diesel cars first registered from 1 April 2018 and a rise in the existing Company Car Tax diesel supplement from 3% to 4%, with effect from 6 April 2018.

“A freeze in fuel duty is a welcome decision. Fuel duty increases would have been the wrong tool to use to address air quality,” explained Christopher Snelling, head of national policy at the Freight Transport Association (FTA).

 
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