There was a resolution on March 22 as follows:
“13. Rates of air passenger duty
(4) The amendments made by this Resolution have effect in relation to any carriage of a passenger on an aircraft which begins on or after 1st February 2007.
(5) But if the amount of duty due from any operator in the accounting period ending before 21st March 2007 increased as a result of those amendments, the operator is to pay the amount of that increase as if it became due in the first accounting period ending after that day.
And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.“
Paragraph (5) says that to the extent that the increase in tax was uncollectable because there had not been a resolution in parliament, then the tax is treated as arising at a later date. In other words, because the government didn’t get its act together in time, the law will deem that events didn’t happen when they did.
Anyway, lets draw a line under that … and look at petrol duty (which was subject to the same issues as APD) instead.
After the 2006 Budget, the duty rates were as follows (source: HMRC website):
The new effective rates of duty from 1 September 2006 will be:
Light oils Effective duty rate per litre (£)
Ultra low sulphur petrol (ULSP) 0.4835
Sulphur-free petrol (SFP) 0.4835
Unleaded petrol that is not ULSP or SFP 0.5152
Aviation gasoline (AVGAS) 0.2884
Light oil delivered for use as furnace fuel 0.0729
Other light oil (including leaded petrol) 0.5768
In his speech at the time of the PBR in 2006 the Chancellor said:
“And while I will go ahead with an inflation rise in fuel duty from midnightHowever in his 2007 Budget Speech the Chancellor said:
tonight, of 1.25 pence per litre, I will not restore the fuel duty escalator and
I have rejected a real terms increase in fuel duty.”
“For the coming year I will set fuel duty rises at 2p a litre, for 2008 at 2p,
and for 2009 1.8p. But I will defer this year's annual fuel duty increase by six
months to October.”
So it would appear that the Chancellor is proposing a 3.25p a litre rise. But apparently not, because the draft legislation in FB 2007 reads as follows:
10 Fuel duty rates and rebates
(1) The Hydrocarbon Oil Duties Act 1979 (c. 5) is amended as follows.
(2) In section 6(1A) (hydrocarbon oil: rates of duty)—
(a) in paragraph (a) (ultra low sulphur petrol), for “£0.4835” substitute “£0.5035”,
(b) in paragraph (aa) (sulphur-free petrol), for “£0.4835” substitute “£0.5035”,
(9) The amendments made by this section come into force on 1st October 2007.
Point 1: The Chancellor appears to have double counted his increases, because the rate for petrol and diesel from October 2007 will be 50.35p compared with the 48.35p set at 1 September 2006. The 1.25p increase decreed in December 2006 appears to have been subsumed in the 2p increase.
Point 2: As with the Air Passenger Duty increase, there was no PCTA resolution with regard to the 1.25p increase at the time of the PBR or the Budget (nor at any other time as far as I am aware). Furthermore the Budget Resolution for the 2p increase is effective only from October 2007. It looks as though there is no statutory provision for the collection of the 1.25p increase put into effect at the time of the Pre Budget Report. The government has effectively accepted that they were wrong on the APD. What are they doing about fuel duty? Will Ed Balls be airbrushed out of Politburo photographs?
Note: This is not my own work. It was sent to me by a reader who wishes to remain nameless.