RHA urges VAT on fuel Call to scrap
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Training Act
• It is strongly urged by the Road Haulage Association that value-added tax should be applied to fuel in the usual way and hauliers should be permitted to offset it against tax paid on the production of an invoice.
The Association thinks that this system should create no difficulties and has further recommended in a memorandum to the Department of Customs and Excise that VAT should be applied as widely as possible, with the minimum of exceptions and variations, if its effect is to remain neutral throughout the chain until the final point of sale.
"Any exception to this basic principle will", says the RHA, "lead to complications in record-keeping, loss of confidence in the system, evasion and price inflation."
The memorandum argues that VAT arising from proper business expenditure should be allowed to be offset against tax payable by the haulier. Under this heading the Association includes subsistence allowance paid to drivers while away from home. It is pointed out that benefits in kind and disallowable items of expense are already taken care of inpersonal income tax assessments.
"It seems to the Association unfair that a creditor who suffers a bad debt should also be expected to pay VAT on the loss," says the memorandum. "It is suggested that Customs and Excise should rank as a preferential creditor in any loss."
Hauliers who have the option either, to join or to be exempt from the VAT system should, it is said, be permitted at the end of two years to reverse their previous decision. Footnote: Last week (CM January 7) the RAC urged the Government not to subject petrol to VAT. Said the Club: "Unless petrol sales are exempted from this tax, or petrol tax is reduced to compensate for VAT', prices will automatically be inflated."
—Ed.