If a litre of petrol has a forecourt price of 107.9, 32.6 pence of that is product and 8.88p retailer margin. The rest is duty at 50.35p and VAT at 16.07.
You can see from this that global shifts in price should have less effect on the motorist than the Chancellor.
Most taxes in this country have a basis in the original figures. Income tax increases as you earn more, so does national insurance. You pay more capital gains tax on a larger gain. If you buy something, the VAT bill will be greater as the cost goes up.
But for petrol, alcohol and tobacco the tax is based on the unit of sale. Leave alcohol and tobacco aside, because we don't need those to get to work and deliver goods, it is insane to base a tax on a unit to the point at which it is far more than the cost of the product.
Historically, Chancellors have claimed that the increased tax was justified to reduce car numbers and miles travelled. But at the same time this country has thrown open its borders to people in search of a better life. And that is represented by a car.
Tax petrol, by all means, but can't we have a sane basis? Why can't the duty relate to the cost? I know Brown needs £15 billion this morning to prop up the mortgage market but there are other targets than the motorist.
The trouble is that we are not as well represented as wealthy non-domiciles and private equity entrepeneurs. Proportionally, we are taxed more and that can't be right.
Sorry to start the day so seriously but I'm tired of being a taxation sitting duck.
Edited by Optimist on 17/04/2008 at 09:22
|
As the majority of the working population own and use cars you should think of it as a tax on the working population rather than a tax on the motorist.
At least you have a choice and some level of control over how much tax you pay.
With the housing market in such a poor state the government are going to be very short of cash.
Expect more taxes.
|
|
|
That`s how i feel being taxed on a private pension. I think living like a nomad on a canal narrow boat is the only way out of fuel tax and community charge. Or have I missed something ;)
Regards
Edited by oilrag on 17/04/2008 at 09:32
|
"Or have I missed something ;)"
Leave the country
|
|
|
I think part of the problem is we accept these taxes - and I don't mean thats because we don't have mass protests etc.
There is a large percentage of motorists out there who will just fill their tanks regardless, maybe employer pays for it, maybe they feel they have no alternative but, accepting that some people don't have an alternative, many do.
I recently discovered that there is a good train service between home and work, yes maybe a 10-15 min walk each side that, during winter especially, I would prefer not to have. But its an option and close to being a cheaper option than driving. I also try to cycle into work 2 or 3 times a week in the summer.
How many people still jump in their car to go to the local shop? How many people could car-share with a fellow employee but don't?
How many people could maybe work from home? Or maybe change their working pattern to 4 long days rather than 5 standard days and save a fifth of their journeys?
I accept and understand that these don't apply to everyone, but I am convinced there is a large percentage of the working population it does apply to.
Now some will argue that if we all stop using petrol then the govt won't get the tax and they will need to get it from somewhere else, and this is where the vicious circle starts! At this moment in time if we are treating it as a tax, and to a certain extent by varying my travel methods I can indulge in tax avoidance, then I am happy with that!
|
It's less lunatic than Council Tax which taxes you according to the value of your house.
|
|
|
BG - spot on - its something you have some control over and the tax can be avoided.
With motoring becoming so expensive its getting close to the point where it will be cheaper for me to get the train to work.
I think fuel tax still has a way to go before people start using their cars less. hence, I expect to see taxes rise even further over the next couple of years.
Time to buy a VW UP?
|
>>I think living like a nomad on a canal narrow boat is the only way out of fuel tax and community charge. Or have I missed something ;)
Yup, they now tax the red diesel you put into your canal boat. You'll need a yacht that can sail to Jersey to fill up.
I think OP's rant is so full of errors I don't know where to start. Fair enough, we pay too much tax, but I struggle to draw the parallels he seems to.
|
|
|
It's less lunatic than Council Tax which taxes you according to the value of your house.
I second that!
I always assumed that we are an overly taxed country. Then few days back in the very forum, someone pointed out that we pay less tax than many EU nations (which I found somewhat true).
We often rant about govt. policies here. But that's all what we do. Ranting here won't change the policies (though it makes us feel better)!
To change the policy -
1. We need to reflect our dislike via vote
2. Write to local MPs
3. Communicate with other people/organizations who think on same line
Sadly, I don't see how petrol price can come down in near future. Most likely it will go up.
If you are not willing to spend more, than natural choice will be downsizing (I personally came down from 1.5 to 1.3 engine last year - though not necessarily for petrol price increase :)
Leaving the country - well that's entirely personal choice.
British economy will only get worse - so plan your life accordingly.
|
I don't feel that its the actual level of taxation that angers folks, more the use to which the taxation is put. Road Tax & Fuel Excise duty would be much better received if we could actually see the money going into the road infrastructure.
Similarly with Council Tax. I'll bet you that when house prices fall that the council tax doesn't do likewise.
|
>>I'll bet you that when house prices fall that the council tax doesn't do likewise.
Why should it? It didn't go up because house prices rose. It went up because it is tax through the back door. Mr "I will not increase income tax" Gordon "But I will tax anything else I can" Brown.
Your council tax is based on the value of your house in 1991. Would you rather it had been based on the value in 2004?
Keep Daily Mail rants out of it. There is much that is wrong with this country's taxation system. Too much tax, collected badly, complicatedly. Go for the bad bits, not the bits the Mail complains about.
|
|
|
|
If drivers are so concerned about the price of fuel, why don't they slow down a bit? I found, during the last fuel crisis, that the old Mondy was about 25% more fuel efficient if I travelled at 60 rather than 80. Leaving a decent gap between yourself and the vehicle in front means that you aren't constantly on and off the brakes, leading to further fuel saving.
Whilst this applies to Mondys, I'm not sure that it works for BMW drivers, though. Maybe someone else pays for their fuel.
|
If drivers are so concerned about the price of fuel why don't they slow down a bit?
Indeed. On the DCs round here people are still lashing along at 90+ like the stuff was still 50p/litre.
|
|
|
25% more fuel efficient if I travelled at 60 rather than 80
You can't expect average public being so enthusiastic about economic MPG figures!
We (those who discuss here) are some sort of "crazy" people who treat their cars like "babies".
95% of public have no idea what MPG their cars do.
|
|
|
I found during the last fuel crisis that the old Mondy was about 25% more fuel efficient if I travelled at 60 rather than 80.
Are you sure that you weren't travelling along a road near a BOC depot?
|
|
|
Whilst this applies to Mondys I'm not sure that it works for BMW drivers though. Maybe someone else pays for their fuel.
I like that! I think the same thing can be said (about BMW's) for getting into the inside lane as soon as possible on motorways where there are roadworks and closed lanes ahead. It just doesn't seem to apply to the Beemer brigade...........as fast as possible to the front of the queue....very Teutonic.
|
|
|
|
|
maybe employer pays for it
Even so, ultimately we all pay for higher petrol, whether we are motorists or not.
|
|
|
|
That`s how i feel being taxed on a private pension. I think living like a nomad on a canal narrow boat is the only way out of fuel tax and community charge. Or have I missed something ;)
You didn't pay tax when you put the money into the pension.
Why should you not pay when you draw it out?
|
Stop criticising tax. Start criticisng Government spending. As it is the Gov't spends £40billion more than it receives in taxes :
mainly on Social Security.
So stop whingeing on taxes and start on expenditure.
And if you don't vote, don't whinge.
Edited by madf on 17/04/2008 at 12:06
|
|
|
|
|
Based on his reaction to JC's views of Alemra owners, and the lunatic rant on taxes here, I think Optimist should change his name to "Paranoid".
;-)
|
Wouldn't it be good if the tories appeased drivers on fuel to get our vote at the next election.
This could be done by a sliding tax on fuel which could be used to keep fuel at a set price.
As the price of fuel increased the scale of tax would be decreased. This would keep fuel at one price. Goods and services would not pass on fuel duty to their customers, hence calming inflation. Everyone would know where they stood. And forbid, the price of fuel came down, their chancellor could increase tax to maintain the status quo.
Right.......Ready....... WW1 biplane- ground to air machine gun- ball of fire!!!!!!!
Edited by Dynamic Dave on 18/04/2008 at 14:22
|
Move to Iran where it's 7p a litre, and the roads are exquisite...
www.iranian.com/Features/Feb99/Tehran/Images/photo...g
|
|
|
Certainly it is spending which is the issue not tax.
We have over 500,000 more [sic] civil servants than in 1997. I thought 500,000 as a total would have been enough. There are over 200 working in the cabinet office alone apparently, helping ministers, and this obviously excludes their whole back up support known as their ministry of [e.g. transport].
This morning I hear that there are over 100 groups working on issues relating to supermarkets! Madness! I genuinely think it's a sort of desease you get when there are no [discerning] shareholders. Whenever speding something extra is mentioned, the press never talk about the total amount.
Most of those paying 22% think they only pay 22% in tax. The daily amounts added on each VAT-added spend, their company's tax paid are forgotten or not even known about. "Tax-free" day is now well into June [on average we now work Jan-May for the Government]. In Wilson's day is was in early May.Why are Council's asking us for our ideas as to how they can serve us better, i.e. employ more/higher paid people? Why not say they've found a way to do far less.
|
Judging by the some of the comments on here no wonder we have high taxation on fuel.
'Slow down' and 'use the train' are the banal arguments that our current government love to see us using. As is the instant acceptance of anything these days as long as the words 'green' or 'environment' are used in the same sentence.
I agree with the OP. I can't use public transport in my commute. I only do 70mph maximum on the motorways. I am putting 30% more money into my car for fuel than I did the same time last year, and I've converted to diesel. Most of the £50 weekly cost is tax - of which a tiny amount makes its way to the roads.
|
|
110p/litre now in Oxford for petrol. I'm abroad for six months in June and you can bet I'll be brimming the car *before* I go. Dread to think what it'll be when I get back. Out of interest, I found virtually no difference in fuel economy for the Honda whether sat at an indicated 70 or 85. I suspect the major savings only start to happen when you get down to around 50-60mph.
|
|
|
|
|
|
The duty being per unit, rather than per-cost, is what's largely sheltering us from the huge rise in the price of oil.
Those in low-duty countries are really hurting. They've built their economies and lifestyles on cheap fuel, leading to urban sprawl and ridiculously fuel-inefficient vehicles becoming the norm, and they are now being clobbered by incredibly steep rises in fuel price. With worse to come.
We're getting off with much smaller percentage increases in end-user price, causing much less harm to individuals and the economy.
|
>>no improvement until you reach 50-60mph
I guess the fuel consumption (beyond a certain point which is probably a little above tickover in top gear, so maybe 45-50mpg) will go up with the square of the speed.
This would suggest that fuel consumption at 50mph is half that at 70mph which itself is half that of 100mph. There's probably some broad truth in that. 44mpg at (indicated) 70mph drops to 38mpg at (indicated) 80mph.
Never had the patience to try a long journey at 60.
|
>>will go up with the square of the speed.
Yes, although I don't think it too obvious.
The drag force at higher speeds is proportional to v^2.
This means the drag power is proportional to v^3!
This means the mass flow rate of fuel being burnt is proportioanl to v^3.
But, we want the total, so, we have to integrate - integrating something in v^3 gives and answer proportional to v^2, and there you have it.
A less mathematical route is to argue that yes, the rate at which fuel is being burnt is proportional to v^3, but the journey time is proportional to 1/v hence consumption is proportional to v^2.
>>Never had the patience to try a long journey at 60.
Doing exactly this is making a significant improvement in the mileage I'm getting out of our E300D when compared with more normal speeds of 70 - 75.
|
>>Doing exactly this is making a significant improvement in the mileage I'm getting out of our E300D when compared with more normal speeds of 70 - 75.
Are you running on SVO then? Isn't that engine designed for it?
PS, thanks for the physics!
Edited by Mapmaker on 17/04/2008 at 16:44
|
>>Are you running on SVO then? Isn't that engine designed for it?
It's probably one of the most SVO / WVO friendly engines there is, although I'm not sure about saying the engine was designed for it. The fuel pump is an old fashioned inline pump, and is probably as immune to problems as any.
However, I just don't want to risk having the fuel filter plug with waxy, fatty gloop. I'm also a bit concerned about stories of the fuel causing a reaction in the engine oil, and turning it into gel.
So, although I'm not happy with the amount of tax on fuel [nor the profligate public spending it supports], and despite finding the price of fuel forms an increasing proportion of our monthly spend, I will only be putting forecourt diesel in.
|
|
|
|
|
Mapmaker: >> I think OP's rant is so full of errors I don't know where to start. Fair enough, we pay too much tax, but I struggle to draw the parallels he seems to.
Have a go, Mapmaker, have a go. You tell me where the errors lie. Someone said people in other countries would be hurt more by the price increase in crude. But that's because they pay lees tax in their pump price. What they pay for is the fuel.
Even if we all responded by using our cars less we're still in trouble because Darling has just geared fuel tax rises for the next few years, oil is going up too and we use trucks to deliver our food and other goods, so they will go up in price.
I don't regard what I said as a rant. Road users have been a soft target in this country. When I was talking about non-doms and private equity entrepeneurs I wasn't drawing a parallel. I was saying: if the Chancellor needs money, he can get it from there, just for two examples. But they are a bit difficult.
|
It's stoopid to go on about non doms and private equity .. these people are mobile. Tax them too much and they move to France or Lichenstein or Outer Mongolia or wherever. As do businesses. Fact.
Even a dumb bunch of incompetent politicians can see that. Which is why they stick to taxing the people who cannot move or will not. Like mortorists or houseowners...
Simple.
|
|
|
|
|
|
As requested, OP.
If a litre of petrol has a forecourt price of 107.9 32.6 pence of that is product and 8.88p retailer margin. The rest is duty at 50.35p and VAT at 16.07.
Few retailers manage that sort of level. Most of the profit in a filling station is in selling bottled water.You can see from this that global shifts in price should have less effect on the motorist than the Chancellor.
A non sequiturMost taxes in this country have a basis in the original figures. Income tax increases as you earn more so does national insurance.
Those two statements do not add up. Income tax is a progressive tax. NI rapidly drops off to 1%.
>>You pay more capital gains tax ona larger gain.
Proportionately, but not progressively. So completely different from both income tax and NI.
>>If you buy something the VAT bill will be greater as thecost goes up.
Proportionate but not progressive.But for petrol alcohol and tobacco the tax is based on the unit of sale.
As used to be RFL - I presume you'd like to return to the old flat-rate system. BUPA contributions and school fees (both forms of tax) are flat rate. Should they be income related? (hang on, school fees are).Leave alcohol and tobacco aside because we don't need those to get to work and deliver goods it is insane to base a tax on a unit to the point at which it is far more than the cost of the product.
No it's not. It's taxation. The art of taxation is to pluck the goose so as to extract the maximum amount of feathers with the least hissing. (Quoth Louis XIV's treasurer.) It makes perfect sense to tax an essential item if you want to increase the tax raised.Historically Chancellors have claimed that the increased tax was justified to reduce car numbers and miles travelled.
Only in very recent history. Historically Chancellors have charged duty on luxury goods as the users can afford it. e.g. watches; petrol.But at the same time this country has thrown open its borders to people in search of a better life. And that is represented by a car.
Eh? My Polish cleaner has no car. Tax petrol by all means but can't we have a sane basis? Why can't the duty relate to the cost?
It's just as well that it doesn't. If the tax rate were 60% two years ago, and continued to be, proportionately, the same, then petrol prices would be even higher.The trouble is that we are not as well represented as wealthy non-domiciles and private equity entrepeneurs. Proportionally we are taxed more and that can't be right.
We can leave the country too. Sorry to start the day so seriously but I'm tired of being a taxation sitting duck.
Emigrate. Or campaign to change the Government. Do something about it: Boris Johnson is looking for people to do telephone canvassing for his campaign as Mayor of London. Defeating Red Ken will be a major victory for the winds of change. You don't have to live in London to be emailed a list, go on. www.backboris.com My guess is you won't bother, but will continue to whinge.
If however you do, thank you.
|
>> If a litre of petrol has a forecourt price of 107.9 32.6 pence of that >> is product and 8.88p retailer margin. The rest is duty at 50.35p and VAT at >> 16.07. Few retailers manage that sort of level.
So assuming the net price of fuel is correct at 32.6p, where is that 8.88p going if not to the retailer?
|
Sorry, fair point. I didn't read it properly and assumed he meant profit margin, whereas it actually means gross margin.
|
Optimist may have quoted his figures from this source:
www.petrolprices.com/price-of-petrol.html
Prices in other countries a few years ago:
uk.theoildrum.com/uploads/465/cv_europe_fuel_price...f
Edited by jbif on 17/04/2008 at 18:30
|
|
|
Mapmaker.
1) You've already acknowledged your error on the retailer's margin. Or incomne per litre, if you like.
2)You can see from this that global shifts in price should have less effect on the motorist than the Chancellor.
A non sequitur.
No, it's not a non-sequitur. That's one thing that fails to follow from another. My point is that on fuel actually costing 35p a litre a 10% increase is 3.5p which is less than Darlings's inflation rated increase per gallon.
3) >> Most taxes in this country have a basis in the original figures. Income tax increasesas you earn more so does national insurance.
Those two statements do not add up. Income tax is a progressive tax. NI rapidly drops off to 1%.
No, there's now no upper limit on earnings for NI. Darling changed it in the budget.
4) >>You pay more capital gains tax ona larger gain.
Proportionately, but not progressively. So completely different from both income tax and NI.
Don't matter. Bigger the gain. Bigger the bill. And that wasn't my point.
5) >>If you buy something the VAT bill will be greater as thecost goes up.
Proportionate but not progressive.
Don't matter. bigger the etc.
6) >> But for petrol alcohol and tobacco the tax is based on the unit of sale.
As used to be RFL - I presume you'd like to return to the old flat-rate system. BUPA contributions and school fees (both forms of tax) are flat rate. Should they be income related? (hang on, school fees are).
I'd have a system where the tax on fuel was based on a % of it's cost. VAT added on the lot, if you want. People who use more would pay more but you wouldn't be buying something where the duty and tax is more than the product.
7) >> Leave alcohol and tobacco aside because we don't need those to get to work anddeliver goods it is insane to base a tax on a unit to the point at which it is far more than the cost of the product.
No it's not. It's taxation. The art of taxation is to pluck the goose so as to extract the maximum amount of feathers with the least hissing. (Quoth Louis XIV's treasurer.) It makes perfect sense to tax an essential item if you want to increase the tax raised.
Why don't they do it in all other countries asa we do it here, then?
8) >> Historically Chancellors have claimed that the increased tax was justified to reduce car numbers and >> miles travelled.
Only in very recent history. Historically Chancellors have charged duty on luxury goods as the users can afford it. e.g. watches; petrol.But at the same time this country has thrown open its borders to people in search of a better life. And that is represented by a car.
Eh? My Polish cleaner has no car.
That proves your point, then.
9) >> Tax petrol by all means but can't we have a sane basis? Why can't theduty relate to the cost?
It's just as well that it doesn't. If the tax rate were 60% two years ago, and continued to be, proportionately, the same, then petrol prices would be even higher.
Do the math. You're just wrong.
10) >> The trouble is that we are not as well represented as wealthy non-domiciles and privateequity entrepeneurs. Proportionally we are taxed more and that can't be right.
We can leave the country too.
Do we actually know of any really wealthy non-dom or private equity baron who's left the country? They talk about it, but how many do?
11) >> Sorry to start the day so seriously but I'm tired of being a taxation sittingduck.
Emigrate. Or campaign to change the Government. Do something about it: ......My guess is you won't bother, but will continue to whinge.
Oh dear. Do people who don't agree with you always get accused of whingeing?
What makes you think I don't campaign?
(Mods. Sorry this is so lengthy.)
|
No, there's now no upper limit on earnings for NI. Darling changed it in the budget.
I must have missed that part of the budget and the HMRC web site must also be wrong (at least the bit I am reading). Can you provide proof of your claim that Mapmaker's reference to 1% is wrong and that "No, there's now no upper limit on earnings for NI"?
|
You're right jbif. I have just checked the budget policy decisions. Employee NIC's are charged at 11% on earnings of £105 to £770 per week, after which they fall to 1%. I was mis-informed and didn't check. Serves me right.
|
I had a further thought on this.
If you fill a 50 litre tank at 107.9 per litre, as in my figures before, that will cost you £53.95.
Paying tax @ 20% and NI @ 11% you'll have to earn £78.18 to nett that figure.
Of your £78.18 you work for, £24.25 goes in tax and NI and £33.21 in fuel duty and VAT on your petrol.
A total of £57.46 to the government to fill your tank.
Makes you think.
|
|
|
|
1) You've already acknowledged your error on the retailer's margin. Or incomne per litre if>> you like.
No I don't like. Completely different. No it's not a non-sequitur.
You've lost me.
No there's now no upper limit on earnings for NI. Darling changed it in the Don't matter. Bigger the gain. Bigger the bill. And that wasn't my point.
So you had no point. IT is "progressive". The bigger the income, the higher the tax rate. CGT is flat rate since April this year. NI starts off "progressive", and then becomes the opposite... regressive? All three taxes which you chose as your example as being much better than petrol duty have very different profiles.
I'd have a system where the tax on fuel was based on a % of it's cost. VAT added on the lot if you want.
VAT already is added on. I really doubt anybody on this site thinks that petrol should cost, taking your original figures, (32.6 + 8.8)*1.175= under 50p per litre. Just imagine the effect on congestion and the planet of a 50% cut in petrol costs. So lets say that 75p is a 'fair' price; this suggests a duty rate of 80%.
Now oil prices have gone up 300% over the last five years (that's a guess, I can't be bothered to look actually that's nearly spot on www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/04/...L ). This would mean that five years ago the pump price would have been (32.6/4 + 8.8) * 1.8 = 30p.
This would give us a 150% inflation rate. That really would get you screaming.
Alternatively... lets say that five years ago the duty rate was set to give a petrol price of 60p. That would give a duty rate of 60/(32.6/4+8.8)=3.53 so a duty rate of 253%.
Apply that to the current price (32.6+8.8)*3.53 = £1.46 today. I bet you'd really be complaining. And I bet the Chancellor wouldn't be rushing to reduce the duty rate.
Do the math. You're just wrong.
I have done. See above. And it's not me that's wrong...
Why don't they do it in all other countries asa we do it here then?
Aha! So you'd like to be a part of the United States of Europe, perhaps? In answer to your question, because taxing consumption is far better for productivity than taxing income.
Do we actually know of any really wealthy non-dom or private equity baron who's left the country? They talk about it but how many do?
It's not the really wealthy that will leave. It's the fairly wealthy to whom a £120,000 per annum tax bill will be a killer (for a family of four).
Do we actually know of any? Well in the news this week is a taxpayer who has decided to emigrate to Ireland which will cost us tens or hundreds of millions in lost tax.
www.telegraph.co.uk/money/main.jhtml?xml=/money/20...l
What makes you think I don't campaign?
Gut feeling. Best chance to give the Government a kick in the teeth is the Mayor of London; and best of all you don't have to live in London to help.
Edited by Mapmaker on 18/04/2008 at 11:10
|
OK. I'm not going to pursue the argument.
Except to say that Shire is just using a tax avoidance scheme, in effect. The company will register in Jersey but be "domiciled" in Ireland. The corporate tax rate in Ireland is lower than the UK. The company will keep its operations base in Basingstoke and not cut any jobs. It's not clear that Shire actually carries on any business in Ireland. If that is the case it just underlines the artificiality of the move.
Shire paid £8.8 million in tax last year (not tens of millions) and less than half of that was corporation tax. Since it's staying in the UK physically and not downsizing, it will still be accounting for PAYE.
It's likely that the cost of the re-structuring in legal fees will be more expensive to Shire than the tax it will save.
Don't believe everything you read in the Daily Telegraph. Shire isn't even a person. It's a company. People don't uproot and move away so easily. Especially me. Though I have noted your suggestion that I emigrate, MM.
All the best.
|
>>Shire isn't even a person. It's a company.
Quite. Shire IS a person. Where did I suggest it wasn't a company?
It is a perfectly straightforward way for a company to reduce tax. Make tax rates uncompetitive and taxpayers will leave the country where they can. You are right, it is an avoidance technique. The move is entirely artificial. And it is a result of over-taxing income. Tax expenditure, not income. Tax on petrol is perfectly sensible.
Edited by Mapmaker on 18/04/2008 at 14:15
|
I'm sure that if Backroomers viewed 'slowing down a bit', not as a pain, but as a method of tax-avoidance and sticking up two fingers at messrs Brown and Darling, they would find it rather more appealing.
Whilst journeying on the A14 recently, I have become aware of more car drivers tucking in behind HGVs and holding 60ish. Maybe they've done the maths, if they aren't in a particular hurry?
|
Oil is at a new high $116 today... that's a new alltime high. Forecast $125 ish..
Of course if that nice clever and successful President Bush bombs Iran before he leaves office, $125 will look like pennies...
|
|
|
|
|
|
|
