Autumn Budget Statement Generally Suits Road Haulage Freight Interests
Encouragement from UK Logistics but Brexit Concerns Remain UK – Despite a general welcome from freight and logistics providers, particularly road haulage operators, the Chancellor’s Autumn Budget statement still sat somewhat in the shadow of uncertainty caused by the forthcoming Brexit negotiations. Despite the ridiculous stance from most mainstream media, which cannot it seems realise that negotiations with our former European partners are over matters which must be discussed behind the closed doors of dozens of countries as well as the European Union officials concerned, this budget has at least demonstrated the government’s current attitude to trade.
The continued freeze on fuel duty was the big ticket item for most stakeholders and by announcing this seventh such consecutive suspension, most were at least satisfied, if hardly delighted. The Freight Transport Association (FTA) which has consistently called for a 3p per litre cut in fuel duty made plain its standpoint through the comments of Deputy Chief Executive James Hookham, who said:
“Naturally we are pleased with the Chancellor’s decision not to increase fuel duty in line with inflation as previously planned. The freeze will save truck operators, the majority of which are small and medium businesses, about ?9,000 a year for a typical ten-vehicle fleet. The Chancellor has understood the arguments made by the FairFuelUK campaign and fuel duty has moved from being a ‘sin tax’ like alcohol and tobacco duty to being recognised as a core burden on families and businesses who can be helped by freezing it.
The Chancellor needs to continue that logic and recognise that reducing tax duty in future will bring even greater benefit to the economy.” The Road Haulage Association (RHA) congratulated Mr Hammond on his first Autumn Statement, and said it was pleased that he has recognised the vital role that UK haulage operators play in moving the nation’s economy. Although again the RHA wanted a cut in fuel duty, which it said would have made a real difference to its members’ operating costs, as regards the status quo ‘We’ll happily take that’ was the message.
The other big factor which all the industry lobbyists picked up on was the promise to invest large sums in infrastructure, and all had comments on something which is such a key factor in ensuring the country has a transport system fit for purpose. Peter Ward, CEO of the United Kingdom Warehousing Association (UKWA) talked this up whilst offering a word of caution to the nation’s warehouse keepers when he observed: “The Autumn Statement gives some indication of what we might expect from the Government’s forthcoming Industrial Strategy and UKWA members will have been encouraged by the fact that the Chancellor is clearly focused on delivering the infrastructure upgrades that are needed to support a productive economy.
Mr Hammond’s pledge to spend ?23 billion on innovation and infrastructure over five years and, in particular, his plan to commit ?1.1 billion extra investment in English local transport networks and ?220 million to reduce traffic pinch points, is particularly welcome news. Investment on this scale is clearly needed to support a logistics sector which is underpinning the rise of e-commerce. “However, the Chancellor’s stark comments regarding the wider post-Brexit economic challenges that face the nation reinforce the critically important role that UKWA will be playing as the voice of the logistics sector in supporting the government’s negotiations over the next few years.
It is essential that our members are properly represented and for the government to fully understand the serious implications from a logistics perspective of our trading relationships with Europe and the rest of the world. This work has already started and we are working hard to help our members and the nation achieve the best possible outcome in the post-Brexit world.” The infrastructure investment was also warmly welcomed by the RHA whose chief executive Richard Burnett pointed out that road hauliers are responsible for the movement of 85% of goods each year, and for drivers this was their place of work saying:
“Any measures to make their journey easier, more efficient and certainly more cost effective will contribute greatly to the movement of the UK economy and help ease the cost of congestion. This costs billions of pounds each year to millions of householders across the UK, [however] the news that Insurance Premium Tax is to rise by 2% comes as a disappointment.” The local transport cash includes that ?220 million to address traffic ‘pinch points’ on strategic roads and this was singled out by the FTA’s James Hookham who added:
“The increased spending on infrastructure is great news and we await the details of which specific road and rail schemes will go ahead in the next few days, but we are pleased that the East-West corridor investment between Oxford and Cambridge is going ahead. Another priority for FTA is the route of the approach roads to the new Lower Thames Crossing between Gravesend and Tilbury. More money for local infrastructure is welcome and we will be presenting our list of preferred schemes to local highway authorities and the devolved governments to prioritise those that most benefit freight movements.”
So, as to the overall situation, just what did this Budget hold for the industry, either directly or indirectly?
Points to consider included:
- From 23 November 2016 to March 2019, businesses will be entitled to a 100% First Year Allowance for the cost of installing electric charge-point equipment for electric vehicles
- From 1 December 2016, income tax and capital gains tax advantages of new shares issued in return for ’employee shareholder status’ will be withdrawn (shares already held not affected)
Both the above are for immediate implementation, whilst the following will take effect from the new tax year in April 2017.
- Income tax rates and allowances confirmed as announced at Budget 2016: tax-free personal allowance will be ?11,500, threshold for 40% tax will be ?45,000
- National Insurance thresholds for employers and employees to rise and be made consistent at ?157 per week (currently ?1 apart at ?155 for employees, ?156 for employers)
- New penalties for being connected with a VAT fraud in circumstances in which the person ‘knew or ought to have known’ that a fraud was going on, to be introduced from Royal Assent to Finance Bill 2017
- New penalties for taking part in tax avoidance schemes that are held to be ineffective
- Benefit of VAT Flat Rate Scheme almost completely withdrawn for businesses spending less than 2% of their turnover or less than ?1,000 per year on goods, excluding capital goods, food, vehicles and fuel
- Tax and National Insurance advantages of ‘salary sacrifice’ schemes to be withdrawn, apart from arrangements involving pensions, childcare, Cycle to Work and ultra-low emission cars
- New tax-free childcare arrangements to be introduced on a trial basis in early 2017 and rolled out later
- Public sector employers become responsible for tax due from individuals working for them through personal service companies and similar arrangements
- ISA investment limit rises from ?15,240 to ?20,000 per year
- Rural rate relief doubles to 100% to match small business rate relief
As from April 2018:
- Class 2 National Insurance Contributions abolished; self-employed retain contributory entitlements through Class 4 NIC on profits or voluntary Class 3 contributions
- ‘Making Tax Digital’ reforms apply to income tax, according to present Government plans; responses to consultations on the proposals to be published in January 2017
There will also be new counter measures against ‘disguised remuneration’ schemes which the government says are operated both by employers and the self-employed.