London, UK: The logistics industry has welcomed the Chancellor’s decision to maintain the 5p cut on fuel duty and freeze the charge for another 12 months. It is the 14th consecutive year in which the level of the duty has not been increased.
Kevin Green, Logistics UK’s director of policy, said: “The extension to the 5p per litre cut in fuel duty announced by the Chancellor in today’s Budget is good news for the logistics sector, at a time when the industry is facing increasing cost pressures from rising wage and fuel costs.
“Logistics powers every part of the economy, and an increase in operating costs at this time caused by the reversal of the fuel duty cut could have caused disastrous inflationary pressure on the economy. Maintaining the fuel duty cut will provide logistics businesses with more certainty as they drive the transition to a greener economy.”
The RHA said: “We are pleased to see the Chancellor has listened to our calls to help haulage, coach and van businesses in his Spring Budget. Continuing the freeze on fuel duty and maintaining the 5p-cut for a further 12 months will help firms deal with economic challenges. “The decision to extend full expensing to leased vehicles and assets should prove a significant support to hauliers, particularly those affected by higher interest rates.
“We are however disappointed that the Chancellor missed the opportunity to provide direct short-term support for operators. With record numbers of haulage firms collapsing last year and the trend continuing, many operators were hoping for a temporary suspension of the HGV Levy and VED on HGVs as well as incentives for the take up of alternative fuels which can drastically reduce tailpipe emissions.
“We welcome the increase in the VAT registration threshold from £85,000 to £90,000 and the extension of the Growth Guarantee Scheme until March 2026 as measures to support small and medium-sized businesses.”
Rain Newton-Smith, CBI chief executive, said: “Draft legislation that extends full capital expensing to leased and rented assets can offer greater momentum to efforts to increase business investment and builds on the CBI’s headline recommendation delivered in the Autumn Statement.”
Budget business highlights
The UK’s chancellor has unveiled the budget for 2024. Here are the key points for business:
- No change to fuel duty, with 5p cut announced in March 2022 still in place
- Full expensing for businesses will apply to leased assets in future “when affordable”. Draft bill to be published shortly
- National insurance contributions for employees are being cut from 10% to 8% from April
- Higher rate of property capital gains tax will be reduced from 28% to 24%
- The non-dom tax status has been abolished. A “simpler” residency-based system will arrive in 2025
- VAT registration threshold for businesses upped from £85,000 to £90,000
- Office for Budget Responsibility predicts UK GDP growth of 0.8% in 2024 and 1.9% in 2025. both up on OBR’s predictions last November
- Office for Budget Responsibility sees inflation coming in below target within “months”.
