Budget 2020: Transport & Logistics predictions

Sean Turner

Sean Turner – Transport & Logistics specialist

The UK is navigating an uncertain Brexit transition period, that makes it essential the UK’s Transport and Logistics sector has support from fiscal incentives, to promote investment.

Despite the Confederation of British Industry (CBI) announcing a “welcome lift in business confidence” at the start of 2020, the Government must not neglect the needs of SME businesses, which form the backbone of the UK economy.  

The industry expects the chancellor to continue the freeze on fuel duty in the forthcoming budget statement on 11 March 2020. Although, this is unlikely to placate the industry at a time when administrative pressures are mounting.

The administrative burden on transport operators involved in cross-border activities is mounting as the industry prepares for the realities of Brexit. To alleviate this pressure, the Government should reset the timetable for the introduction of the new Customs Declaration Service, which according to the most recent round of IT tests, is not yet ready to go live.

The latest information suggests that the current CHIEF system could be phased out as early as September 2020, although this could be postponed beyond this date and operators are concerned that they won’t have access to right software to process declarations. There is growing consensus that the current CHIEF to CDS migration schedule set by HMRC is unachievable.

Fiscal Incentives

pound sign

The Chancellor may need to consider new fiscal incentives if the freight and logistics industry is going to get through Brexit unscathed.

Businesses in the sector are concerned that they lack access to skilled people capable of providing customs declaration services. After Brexit, this skills shortage could severely impact the industry, as the volume of customs declarations (c. 55 million per year) could increase five-fold.

The Government has already introduced grants to subsidise the training of customs declaration specialists by businesses or industry intermediaries. However, more could be done in this area – for example, a targeted fiscal incentive could be introduced, making any capital investment by operators in training initiatives tax deductible.

Posted in News, Transport & logistics