The coronavirus lockdown has left a massive whole in the Treasury’s coffers from lost fuel duty revenue with income down by £2.4bn (£2,416m) in April and May compared to the same time last year, according to the RAC’s analysis of new HM Revenue and Customs data.
Revenue from duty on diesel – charged at 57.95p per litre like petrol – was worst affected. Despite being the fuel of business duty on diesel fell by 49% over the two strictest lockdown months to £1.5bn (£1,510m) compared to £2.9bn (£2,939m) in 2019.
In May diesel fuel duty only generated £695m for the Treasury in stark contrast to 2019 when £1,411m was collected. April raised £815m as opposed to £1.5bn (£1,528m) a year earlier.
Over the same two months in 2019 duty on petrol brought in £1.6bn (£1,621m – £799m in April and £822m in May) or an average of £811m a month. This year with the vast majority of Britain’s 41m drivers confined to their homes, revenue from 18.8m licensed petrol cars fell to £251m in May – the lowest figure since 1990 – and £383m in April, making for a total of £634m. This equates to just £317m a month which is £493m less than the average duty petrol has brought in each month since 1990.
Collectively, the duty take on petrol and diesel fell to £2.1bn (£2,144m – £1,198m in April and £946m in May) compared to £4.5bn in 2019 (£4,560m – £2,327m in April and £2,233m in May). HMRC figures dating back to 1990 show the lost revenue from April and May 2020 was similar to the duty receipts of £2.4bn from just one month in May 2015 (£2,422m).