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Concerns over Budget's green moves

20 March 2008
Categories: News , Admin
'Penalising of biofuels smacks of stealth taxation'

Alistair Darling's 'green Budget' may not have as strong an effect on global warming as hoped.

Grant Thornton has expressed a number of concerns about the Chancellor's plans, including his proposal to remove tax relief on environmentally friendly biofuels.

Tax partner Ruth Dooley said there is currently a 'carrot and stick' approach to such fuels, with a duty discount of 20p a litre, as well as penalties for producers who don't hit set targets for selling fuel from renewable sources.

But, she noted, Alistair Darling announced the abolition of the duty discount, which will benefit the Treasury to the tune of around £550 million from 2010.

The level of penalties is increasing, said Ms Dooley, but it is not clear whether these fines will be paid to the Government or distributed to the greener producers.

She added: 'Given the green statements made by the Chancellor in his Budget speech, it is a major surprise he is penalising biofuels by over half a billion pounds.

'I appreciate there are a range of views about the environmental benefits or otherwise of biofuels.

'However, hiding the change to biofuel duties in the Budget documents, without giving anything back to encourage greener fuels, makes the move smack of stealth taxation.'

Grant Thornton has also said that although the Chancellor called for 'immediate action' against the UK's carbon emissions, he chose only to amend or announce small scale tweaks to green tax policy.

And he further negated his green credentials by delaying the implementation of rises in fuel duty.

Categories: News , Admin
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