UK Chancellor Rachael Reeves has frozen fuel duty, a decision which extends to the island.
The first female chancellor of the UK delivered Labour’s first budget in 14 years over lunchtime today.
The freeze, described as “great news” by Ellan Vannin Fuels, sees fuel duty frozen at 52.95p.
The island follows the UK rates on these and other duties under the Customs and Excise Agreement.
The UK’s minimum age for over 21 year olds will rise to almost 80p an hour more than the island’s equivalent under today’s announcements.
Rachel Reeves says she’ll raise the UK’s the National Living Wage to £12.21p/h from April 1 2025. The island’s rate only rose to £11.45 in July amid expectations the government will drop its commitment to align it with the voluntary living wage after pressure from businesses.
Duty
Rachel Reeves confirmed the draught duty on alcoholic drinks will fall by 1.7% while the non-draught products will increase in line with RPI from February next year.
She has also said that the UK government will renew the tobacco duty escalator which means that taxes will rise by the Retail Price Index (RPI) measure of inflation as well as 2%.
The UK will increase duty by 10% on hand-rolled tobacco this year, meaning it will go up 12% on top of RPI.
Reeves also announced the introduction of a flat-rate duty on all vaping liquid from 2026 and a one-off increase in tobacco duty to “maintain the incentive for smokers to give up smoking”.
Also heading to the island is the introduction of VAT on private school fees, which was already known to be coming.
That will come in January 2025 and King Williams College has already said it will absorb those costs in this academic year.
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