Fuel duty
Fuel duty will be reduced by 1 penny per litre from 6.00pm today and the planned 1 April 2011 increase will be deferred to 1 January 2012. The fuel duty changes announced in the 2009 Budget will be removed and replaced with a "fair fuel stabiliser". When oil prices are above a certain trigger point, fuel duty will increase by the retail prices index alone, but when oil prices are below that trigger point, fuel duty will be increased by the retail prices index plus 1 penny per litre (although the Chancellor has reserved the power to make adjustments to the level of fuel duty where the movements are less significant). The Government has indicated that a price of $75 per barrel would be an appropriate trigger, but will consult with oil and gas companies and motoring groups to set a final trigger price and mechanism.
Low Value Consignment Relief
Currently under low value consignment relief, goods valued at less than £18 are able to enter the UK from outside the EU VAT-free. This threshold will be reduced to £15 from 1 November 2011. The Government has also announced that it will "explore options with the European Commission to limit the scope of the relief so it can no longer be exploited for a purpose it was not intended for." The Government intends to revisit the level of LVCR in the 2012 Budget if no workable solution is found. As the Government could, under EU law, reduce the threshold to approximately £9, there has been some comment as to why it was only reduced to £15.
Air Passenger Duty
In the June Budget the Government had announced that it would consider moving from a per-passenger to a per-plane duty. The Government has now announced that, due to international legal obligations, a per-plane duty will not be introduced at this stage, but it will consult internationally to work towards this. The Air Passenger Duty rates for 2011-12 have been frozen, with the announced RPI increase deferred to April 2012, and a consultation on the reform of Air Passenger Duty has been launched.
Climate change agreements
Climate change agreements (CCA) allow for businesses in energy-intensive sectors to pay a reduced rate of climate change levy (CCL) when certain, agreed, targets are met for energy efficiency. The current CCA scheme ends in March 2013. The scheme will now be extended to 2023, with the current 54 sectors remaining eligible for the scheme. In the summer of 2011, the Government will consult on options to simplify the scheme. From 1 April 2011, CCA facilities will pay a reduced rate of CCL of 35% on all taxable commodities. For electricity supplies, this reduced rate will be 20% from 1 April 2013.
VAT registration and deregistration thresholds and online registration
The VAT registration has been increased from £70,000 to £73,000. The deregistration threshold has been increased from £68,000 to £71,000. The new thresholds apply from 1 April 2011. Subject to consultation, online registration and deregistration will be compulsory from 1 August 2012. Also subject to consultation, the registration threshold will be removed for businesses not established in the UK, meaning that these businesses will be required to register for UK VAT regardless of their level of taxable supplies. The Government will consult on these measures later in the year.
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