See more Daily Mail on Google - save us as a Preferred SourceBy DAVID CHURCHILL Published: 15:31 BST, 12 August 2026 | Updated: 15:36 BST, 12 August 2026
Labour has raked in an extra £1billion in VAT from drivers thanks to sky-high pump prices sparked by the Iran war, it emerged today.Analysis found that since the conflict started on February 28, motorists have collectively been hammered at the pumps by an extra £6billion in higher prices.In turn, ministers have netted an extra £1billion in VAT because the 20 per cent levy accounts for a larger amount towards Treasury coffers when pump prices are higher.It sparked fresh calls on new Chancellor John Healey to use the windfall to scrap a planned Fuel Duty hike in the New Year to ease cost-of-living pressures on families.A 5p a litre cut in the levy introduced by the Tories in 2022 after Russia invaded Ukraine is set to expire on January 1, with ministers currently planning to reverse this reduction from New Year’s Day as they look for money to fund new Prime Minister Andy Burnham's spending splurge during his first days in office.The RAC Foundation analysis tracked consumption and average pump prices since February 28 and calculated the extra shelled out by drivers compared to prices before the war started.Diesel drivers – which includes tradesmen and hauliers – have shelled out an extra £4.3billion, in turn adding £713million to Treasury coffers in extra VAT. Analysis found that since the Iran conflict started on February 28, motorists have collectively been hammered at the pumps by an extra £6billion in higher prices, in turn netting the Treasury an extra £1billion in VAT
