Small businesses have been hit with yet more cashflow pressures today after the 2p rise in fuel duty came into effect following more than a year of floundering by the Treasury.
It’s the second of three recent stealth tax rises to hit Britain’s 33 million drivers, after the government introduced a 5p rise last year.
The AA, which opposed the rise, said for a family with two cars, each using an average of 1,286 litres per year, the annual tax increase will be £54.53.The Freight Transport Association (FTA) added the rise could ‘push businesses over the edge’.
AA president Edmund King said: "These April fuel increases are no joke. It's a shame that this and other fuel tax increases will severely dent consumer spending and undermine the UK's economic recovery.Taking an extra £1 off drivers each time they fill up their fuel tank is a £1 taken away from High Street and leisure spending that would help revive the economy.”
And if this isn’t enough, the FTA said there could be further fuel tax increases this year announced in April’s Budget, as well as a rise in haulage truck firms going out of business.
FTA chief executive Theo de Pencier said: "The government has another bite of the cherry on 22 April. If they take that bite, they are as good as signing the death warrants for some businesses and putting yet more workers onto the dole queue.”
"At a time when jobless figures are already sky-rocketing, the government needs to understand that such actions will only add to them."
It’s an interesting move by the government, which has repeatedly claimed small firms are the key to the UK’s economic recovery. Piling up extra costs on firms in the middle of an economic crisis could send them over the edge. Any further increases on fuel must be postponed.