In its election manifesto, the Conservative party promised to implement a fuel duty stabiliser and the FSB is urging them put it in place as soon as possible.
The small businesses that many umbrella company contractors work through are now on a knife-edge because of record duty and the increase in VAT that have led to 3.5p being added to the price of a litre of diesel or petrol, the Federation pointed out.
A fuel duty stabiliser would freeze fuel duty increases and reduce the duty to match increased VAT revenues from higher prices at the pumps.
The Fuelcard company has also called on the coalition to implement the stabiliser saying it would provide a much needed lifeline to SMEs.
David Cameron said last week that a fuel duty stabiliser was still an option and the government was currently looking into its feasibility. However, the Office for Budget Responsibility has already looked into the stabiliser and reported that it was too costly and impractical to implement.
The Forum of Private Business has suggested that the best solution to tackle soaring prices would be to reduce the duty imposed on fuel. The UK charges the second highest price in Europe for diesel and 62% of that price is made up of taxes.
By reducing the duty, the government would be helping to secure the economic recovery by providing support to SMEs that are struggling to pay record fuel prices, the forum’s chief executive Phil Orford said.
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Image: Pump III by rbrwr
