Earlier this month, the Chancellor Philip Hammond presented his Spring Budget following on from the Autumn Statement in November. The Budget saw more money pledged to the education, health and social care, as well as the controversial tax rise for the self-employed which has since been reversed, but what elements of the Statement and Budget affect the world of logistics?
Firstly, the Autumn Statement announced another year with a freeze on Fuel Duty, which is the tax incorporated into the price paid for petrol, diesel and other fuels. A standard VAT rate of 20% is paid on Fuel Duty, but for years there have been warnings of a hike. At the Autumn Statement, Phillip Hammond stated: “Today we stand on the side of the millions of hardworking people in our country by cancelling the fuel duty rise for the seventh consecutive year.”
For the world of logistics, this is a great relief due to the amount of fuel needed to keep our fleets on the road for our clients and customers. As an integral part of what keeps the industry moving (no pun intended!), and with no option to hop on the bus or perhaps take the bike into work to save on fuel costs, a rise in Fuel Duty would hit the logistics industry the hardest.
During Phillip Hammond’s Spring Budget speech, he also announced that there would be no rise in VED for those in the haulage industry, and no rise in the HGV Road User Levy: “I am freezing for another year both the VED rates for hauliers and HGV Road User Levy.” VED – Vehicle Excise Duty, commonly known as road tax – refers to the tax payable on vehicles due to their emissions, and is based on engine size, or fuel type and level of carbon dioxide emissions.
Launched in 2014, the HGV Road User Levy is the charge payable by vehicles of 12 tonnes or more to contribute towards the wear and tear of the road network. The amount payable varies according to the vehicle’s weight, axle configuration and levy duration. This levy is now applicable to overseas vehicles as well, to ensure that British drivers are not having to bear the burden of wear and tear from foreign vehicles.
This freeze in VED for hauliers and the HGV Road User Levy is most welcome to the logistics industry, as it means that budgets do not have to be stretched to cover any additional tax costs and can therefore go directly into constantly improving the standard of service for our clients and the safety of our drivers.
Investing in ever greater safety and quality of service is something which we at Barnes Logistics always strive towards, and we are grateful that the Spring Budget has allowed us to continue this with frozen tax rates for the industry.