VAT cut on bridge toll to benefit Welsh business

Commuters, drivers and businesses across south Wales and the south west of England are set to make savings as a result of the UK government’s decision to reduce the charges to cross the Severn toll bridges by removing VAT

From 8 January, all vehicles will be exempt from VAT, meaning car drivers will pocket an extra £1.10 as the charge for individual crossings reduces from £6.70 to £5.60. This change will also lift an administrative burden for business users, who will no longer need to claim back VAT.

This move is expected to save regular motorists around £1,400 per year. Businesses across the area will also benefit by not paying over £16 for lorries to cross the Severn, with estimates suggesting the abolition will boost the Welsh economy by over £100m a year.

The reduction comes as the crossings return to public ownership, with Highways England, a UK-government owned body, taking over responsibility for the bridges’ operation and management from Severn River Crossing plc.

Drivers are set to benefit further when the UK government abolishes the charges completely by the end of 2018.

Alun Cairns, secretary of state for Wales said: ‘In less than a year we will see the biggest economic stimulus for south Wales and the valleys for decades.

‘This will boost Welsh employment and establish lasting relationships between the economies and communities of South Wales and South West England, creating the most natural growth corridor spanning from Cardiff through Newport to Bristol.’

 Report by Pat Sweet

Pat Sweet |Reporter, Accountancy Daily [2010-2021]

Pat Sweet was the former online reporter at Accountancy Daily and contributor to the monthly Accountancy magazine, pub...

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