The decision comes as part of the Spring Budget, with Chancellor Jeremy Hunt MP confirming the continuation of the temporary 5p cut and the cancellation of the planned increase in line with inflation for the fiscal year 2024-25.
Reacting to the announcement, sectoral organizations have voiced their opinions on how this move will impact their respective industries.
The Road Haulage Association (RHA) has welcomed the decision, acknowledging that the freeze on fuel duty and the extension of the 5p-cut will provide much-needed relief to haulage, coach, and van businesses. Such measures are deemed crucial in helping firms navigate through the current economic challenges.
Richard Burnett, CEO of the RHA, expressed satisfaction that the Chancellor has heeded their calls, particularly highlighting the importance of extending full expensing to leased vehicles and assets. This move, he believes, will offer significant support to hauliers and coach operators, especially amidst the backdrop of higher interest rates.
However, Burnett also expressed disappointment that the Budget did not provide direct short-term support for operators.
“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,” Burnett said.
Furthermore, RHA noted the increase in the VAT registration threshold and the extension of the Growth Guarantee Scheme until March 2026 as positive measures to support small and medium-sized businesses.
Logistics UK has also reacted positively to the Chancellor’s announcement. Kevin Green, Director of Policy at Logistics UK, lauded the extension of the 5p per litre cut in fuel duty, stating that it comes as a relief to the logistics sector facing mounting cost pressures from rising wage and fuel costs. Green emphasized the significance of this move in providing businesses with certainty as they transition towards a greener economy, stressing the pivotal role that logistics plays in driving economic activity across the nation.