RISHI Sunak is accused of taking motorists for a ride by clawing back in VAT almost all of his much vaunted cut in fuel duty.

In his spring statement, the Tory Chancellor announced a 5p cut per litre in fuel duty after pressure over record pump prices.

It was presented as a generous UK Government hand-out but in fact it has cost the Treasury a little more than a penny and with the cost of fuel forecast to go up again the amount of tax taken could increase.

This is because fuel duty is levied as a flat rate per litre regardless of the pump price. It was 57p but is now down to 52p. VAT on the other hand is levied at 20% of the full pump price.

Taking real values, the average price of a litre of unleaded at Sunak’s last budget on October 21 was £1.44. The tax take on every litre at the time would have been 57p fuel duty, plus 24p in VAT – a total tax of 81p.

Now, with the average pump price being £1.65 per litre, the tax take is 52p fuel duty plus 27.5p in VAT – a total tax of 79.5p.

That means that Sunak is losing less than a penny and if the pump price goes up again the Treasury will be taking in more tax than ever.

The “sleight of hand” was slammed by SNP MSP Rona Mackay.

“Just like his fake photocall filling someone else’s tank, Rishi Sunak is trying to play people for ‘fuels’,” she said. “He was absolutely bursting with self-satisfaction earlier this week when he hyped up his fuel duty cut.

“He portrayed it as a massive act of Tory generosity when it is absolutely nothing of the kind because the spiralling price of petrol at the pumps means the Treasury is already clawing back in VAT pretty much every penny of that cut.

“And if prices continue to rise, the Treasury will actually be quids in.”

Mackay said it was further proof the Tory Westminster government was doing the bare minimum to protect family incomes during the fuel crisis.

“Because extra VAT receipts cover the fuel duty cut, Sunak could have gone so much further in other areas – like restoring the £20 universal income uplift or matching the Scottish Government’s 6% increase in benefits,” she said.

“Instead, he tried to pull off his fuel duty sleight of hand which

won’t help those on the lowest incomes who are most in need of support anyway because they don’t have cars.

“Meanwhile, the Scottish Government is putting money straight into the pockets of the hardest-hit by upping the game-changing Scottish Child payment even further, this time to £25 a week.

“That’s a lifeline £1300 each that children in England will never see. Talk about a tale of two governments – one that actually cares for its children and one that only pretends.”

The RAC has called the cut a “drop in the ocean” and is predicting that the £100 tank for a family car is now “inevitable”.

The organisation said VAT should have been cut instead.

“Temporarily reducing VAT would have been a more progressive way of helping drivers as the tax is applied at the point the fuel is sold, removing any possibility of retailers taking some of the tax cut themselves to increase their profits,” said an RAC spokesperson.

“It’s also the case that the Treasury is benefitting hugely from the high fuel prices because of greater VAT revenue.

“This of course comes on top of fuel duty as VAT is a tax on a tax.”

Gordon Balmer, executive director of the Petrol Retailers Association (PRA) said rising oil prices would wipe out any savings from the fuel duty cut.

“While the Chancellor was speaking, the price of Brent crude went up by $6 a barrel,” he said.