Fuel duty will be hiked by 2% from September, and 1% above indexation every year for the next four years.

According to David Shepard, Federation of Small Businesses, Devon Policy Chairman: “The additional costs of the fuel escalator increase in September, and annually thereafter, will hit the rural economy far harder than any other sector, and this is worst affected part of the economy.”

Commenting on Finance Week's sister publication AccountingWEB.co.uk [1], Sheppard says the budget epitomises the total lack of understanding the Chancellor has of small businesses: “So many missed opportunities to get the economy back on track. The failure to make small business rate relief automatic; failure to raise the VAT registration threshold; failure to extend the reduced VAT incentive. Failure to make business transactions between VAT registered businesses, zero rated. Failure, Failure, Failure.”

Simon Sweetman Accountingweb tax expert agrees: “An increase in fuel duties does not help small business. It particularly does not help logistics and transport businesses and businesses in rural areas.. why is diesel is 10p a litre more than petrol in the UK when it is cheaper on the continent... that’s nothing to do with tax.”