Autumn Budget 2025: Transport & Logistics Sector Predictions & Wish List

As the Autumn Budget 2025 nears, the transport and logistics sector faces potential shifts that could reshape operating costs. A possible fuel duty rise and business rate reforms may tighten margins, while continued EV grants and infrastructure funding could offer some relief. With wider supply chain pressures and potential VAT changes ahead, strategic financial planning will be crucial for business owners.

Fuel duty rates were reduced by 5p per litre back in March 2022 and has not increased for over a decade. However, with fuel prices now approaching levels last seen in 2012, there is growing speculation that the government may consider increasing fuel duty if prices remain stable. Any rise would directly impact transport and logistics costs, adding pressure to already stretched operating margins.

Following an announcement at the Spending Review earlier in the year to commit £400m to the rollout of EV charging infrastructure the pace of this rollout is crucial to the ability of businesses to commit to making decisions regarding investment in their EV fleets. With the policy direction set, there could be further announcements in a similar vein, potentially also pivoting towards other modes of transport such as rail to ease the burden on the road network.

A major reform to business rates is expected on 1 April 2026, with a new rating list due to be published in late 2025. This update is likely to result in a significant increase in rateable values, particularly for businesses operating in high-demand areas. The reform could lead to higher fixed costs for many companies, further tightening profitability.

An increase in fuel duty and business rates would compound existing cost pressures across the supply chain. Inflation has already driven up airline handling fees and warehousing costs, and any additional financial burden could have an immediate impact on the bottom line. Road hauliers, in particular, may feel the effects most acutely, as rising costs across multiple fronts could lead to reduced margins and increased pricing pressures.

In contrast to rising costs, the government’s Plug-In Van and Truck Grants offer a potential avenue for savings. These grants provide up to £16,000 off the cost of small trucks and up to £25,000 for large trucks and are set to continue until at least 2027. For businesses looking to mitigate the impact of fuel duty increases and other cost hikes, transitioning to electric vehicles could offer long-term financial and environmental benefits, which may be heightened with the potential fuel duty increase.

It is expected that there will be a review of the Low Value Consignment Relief regime, currently set at £135.  This is in response to concerns raised by UK retailers, where overseas sellers are perceived to be gaining an unfair advantage that distorts trade and is open to abuse.

Could government look to remove the Postponed Import VAT Accounting (PIVA) mechanism?  PIVA was introduced following Brexit, allowing importers to account for import VAT directly in their VAT returns, rather than paying and later reclaiming.  By removing PIVA, the government would realise a huge cash flow advantage.