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Red diesel rebate scrapped

by Kyle Molyneux  |  Wed 11 Mar 2020

Red diesel rebate scrapped

In his first Budget announcement, new Chancellor of the Exchequer Rishi Sunak has confirmed that, in two years time, the government will abolish the current red diesel rebate of around 47p per litre, in a bid to tackle pollution in the UK and drive firms towards greener alternatives. However, the agriculture sector will remain eligible for tax relief on red diesel beyond April 2022, as will the rail sector, fish farming sector and non-commercial heating (including domestic heating) use.

The changes are expected to cost the construction industry up to almost £500m per year, at a time when profit margins are already tight. However, Sunak suggested discussions are still on-going, so there could yet be some hope for the construction industry. Meanwhile, overall fuel duty remains frozen.

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