The 2024 Spring Budget’s impact on logistics

In this week’s blog, we’re exploring the various policy changes introduced in 2024’s Spring Budget, and how they will impact those involved in logistics.

National Insurance cuts

A notable policy change is the Chancellor’s decision to cut the main rate of national insurance contributions (NIC) in the Primary (Employee) Class 1 NICs category. Effective from April 6, 2024, this cut complements the 2% reduction announced in the Autumn statement.

Leaders in distribution and logistics must ensure that their payroll software and systems are adjusted accordingly. A frequently updated finance management solution (Sage, Xero or Quickbooks) will take any recent national insurance cut into consideration – allowing companies to calculate staff payments correctly.

Full expensing to leased assets

The announcement of full expensing to apply for leased assets will benefit vehicle leasing companies. This initiative provides tax relief by offering a 100% capital allowance for certain vehicle, equipment and machinery investments in their first year.

Previously, this did not apply to leased vehicles. While the government has yet to make a final commitment, the potential extension of full expensing to leased assets is particularly crucial for growing logistics companies seeking to expand operations without purchasing a new fleet of vehicles.

VAT threshold increase

To assist smaller businesses, the Spring Budget has raised the threshold for small companies required to register for VAT from £85,000 to £90,000. Whilst this news may be welcome for businesses trading just below the edge of the current threshold, it is notable that this level has remained frozen for seven years. With ongoing elevated inflation in the UK, this may be seen as a meagre bone for small non-VAT registered businesses.

Fuel duty cut

A freeze on fuel duty for another 12 months has been announced, including a 5p cut. While a positive step, the average driver is expected to save only £50 per year. Haulage companies, who purchase substantially more fuel than the average consumer, will see more substantial savings.

It is also important to note that no chancellor has raised fuel duty since 2011 – so, this policy is not so much of a giveaway as it is a continuation of the status quo, that doesn’t address the factors instigating high fuel prices.

TrackTrans

While some businesses have welcomed certain measures, overall, the consensus from the industry was that the logistics sector had been somewhat overlooked, and the budget is geared more towards the upcoming election.

In this difficult economic climate, utilising a high-quality Transport Management System (TMS) becomes crucial for steering your business in the right direction. TrackTrans, proven, modern, and flexible, has emerged as the solution of choice for many renowned transport operations.

Take TrackTrans for a test drive and explore our free demo today!