Small firms brace for incoming fuel duty hike

The FSB said 54 per cent of firms that saw a rise in business expenses blamed fuel as one of the main causes and it is calling on the Chancellor to scrap the planned rise in the spring budget.

In a recent survey, the FSB found that 89 per cent of firms reported an increase in the cost of running their business this year and 61 per cent of rural businesses cited fuel costs as one of the main drivers, while this dropped to 51 per cent for city-based firms. 

Rural-based firms are at a higher risk of potentially needing to downsize, close, or radically change their business model (18 per cent) compared with 12 per cent in urban areas.

This fuel duty hike could intensify the cost-of-living crisis, with road users set to collectively face an extra £5.7 billion in taxes.

FSB national chair Martin McTague said the Chancellor didn’t mention this fuel tax bombshell in his autumn statement, with the government instead slipping it out in weighty official documents afterwards.

“If fuel duty rises as planned, it would represent a missed opportunity to remove one of the obstacles that will hinder growth — but the Chancellor still has the power to rectify that mistake in next month’s Spring Statement,” Mr McTague said.

“Small firms are already struggling with a cost of doing business crisis, led by rampant inflation and high energy bills. This is the worst possible time to pile on extra taxes.

“FSB is particularly concerned about the impact this will have on rural small firms — for instance, a cosy coffee shop in the southwest that relies on customers driving there if petrol becomes more expensive. Firms that rely on cars and vans for petrol, such as delivery services, tradespeople and farmers, would also bear the weight of the impact.

“The Government must support the small businesses that form the backbone of our rural economy. But now, many of these businesses face the harsh reality of downsizing, closing or changing their business models.

“Small businesses played a significant role in driving the economy and getting people into work after the 2008 financial crisis. The Government is making the right noises about the tools needed for them to get through and thrive — let’s not pull the handbrake on growth with a fuel duty hike.”