Duty on fuel will rise by 3% between April and January next year. Alistair Darling confirmed that the increase, which was widely predicted, will come into force in three installments.
The first 1% increase in fuel duty will be apply from April, with further 1% rises in the autumn and January. Mr Darling told the Commons he was staggering the duty rise ‘to help families and business through this period.’ The decision to introduce fuel duty increases comes at a time when fuel prices are approaching record levels, with the average cost of a litre of unleaded petrol costing around £1.17 and diesel £1.18.
Tobacco duty up 1%
Alistair Darling also announced that duty on tobacco will rise by 1% above inflation from today, with a further 2% increase in real terms each year until 2014.
Alcohol duty also rises
Duty on beer, wine and spirits will rise by 2% above inflation from today. Further annual 2% above inflation increases will come into force until 2013. The Chancellor used the Budget to close a loop-hole that has left cider unaffected by previous duty hikes. He said: ‘There is a long-standing anomaly which has meant cider has been under-taxed in comparison to other alcoholic drinks. I intend to correct this.’
Duty on cider will rise by 10% above inflation from midnight on Sunday. The Chancellor revealed that changes to the definition of cider will be made in September to ensure that certain strong ciders will be taxed more appropriately.
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