While unlikely to astound operators, a study by UHY Hacker Young has pointed out that irrespective of the UK's economic recovery, our fuel-taxation remains cripplingly out of step compared with that of our international competitors.

The UK has the highest pump prices of any major world economy, hitting businesses hard as they struggle to pull out of recession, according to the national accountancy group.

The UK levies a tax of 59% on diesel, which is the highest in any major economy, and considerably more than other major developed economies such as the United States, Canada and Australia.

With diesel used in the majority of commercial vehicles, this heavy burden is borne primarily by businesses, according to UHY Hacker Young.

In comparison, both of the world’s largest economies, the United States and China, have extremely low fuel taxes. The United States levies just 12% on diesel, whereas China levies no taxes at all on these fuels.

Even for Liquefied Petroleum Gas, a more environmentally-friendly alternative to petrol or diesel, the UK still levies taxes of 60%, the highest tax on LPG in the developed world by some distance.

A heavy burden to shoulder

Roy Maugham, tax partner at UHY Hacker Young, says: “Taxes on fuel are an area in which the UK is placing a bigger burden on businesses than in many other countries, which could act as a brake on the speed of recovery from the recession.”

“Naturally, the UK wants to sustain its record on reducing carbon emissions, but fuel taxes are not the only way to achieve that – measures like more attractive capital allowances for energy efficient technologies are a positive way to incentivise businesses to reduce their carbon output.”

“Reduced taxes on diesel would be particularly advantageous for fast-growing small and medium businesses that run fleets of commercial vehicles, especially in sectors like distribution and retail. These businesses can be key drivers of economic recovery.”

It comes after the Treasury last month conceded that fuel duty cuts do indeed boost the economy, a position previously advanced in a couple of reports commissioned by FairFuelUK.