The newly-installed Chancellor of the Exchequer, Kwasi Kwarteng, has announced the government’s Growth Plan 2022 as part of what has been dubbed a ‘mini budget‘. In it, there are a number of statements that affect the logistics sector directly, as well as those who are employed in it. Here is a summary of what was covered.
Changes to IR35 Rules
From the 6th of April 2023, current IR35 rules that pertain to public and private sector off-payroll employment will be repealed. This means that from that date, UK workers providing their services via a personal service company or other intermediaries will once again have responsibility for determining their own employment status, tax and NICs.
Since the current IR35 rules were introduced, companies that employed agency drivers needed to hire them on a PAYE basis. This had driven up costs due to inefficiencies and has been cited as a major contributing factor to the ongoing HGV driver shortage. Statistics show that the number of self-employed drivers dropped significantly during this period.
Investment Zones to Be Introduced
The government has also announced the introduction of new Investment Zones with a view to driving growth and unlocking housing through planning liberalisation and tax incentives. It is said that these zones will attract business by providing:
- Enhanced capital allowances
- 100% land tax & stamp duty relief
- 100% relief on business rates
- Employer NI relief
Measures to Mitigate Strike Action
As has been seen in recent news, strike action at major UK ports has exacerbated existing supply chain issues as workers seek better pay and conditions. As such, the government has included legislation in their Growth Plan that seeks to ensure the minimum disruption.
As such, this legislation will seek to guarantee minimum service levels for transport services so as to make the settling of industrial disputes that much easier.
Reducing the Cost of Energy for Businesses
Also included in the Growth Plan is a package of support that reduces the impact of historically-high energy prices on businesses across the UK. In addition to offering savings for residential households, businesses will benefit through the Energy Bill Relief Scheme that caps energy costs in Great Britain for six months.
Measures Welcomed by Logistics UK
All the measures introduced are aimed at meeting an economic growth of 2.5% in the medium term, and they have been welcomed by the industry body, Logistics UK. Director of Policy Kate Jennings had this to say:
“Logistics UK welcomes the government’s actions to help address growing business costs, namely energy prices. Additional measures announced today, such as changes to IR35 and National Insurance contributions, will give logistics businesses, including SMEs, welcome flexibility.
Investment zones to support further industrial and commercial developments nationwide are a positive step. Logistics is a growing sector, which already supports many of the ‘levelling up’ regions of the UK. To maximise the potential growth opportunities of these zones, it will be important to include the logistics industry in the delivery of these proposals.
However, there is a missed opportunity on fuel duty. Even with the changes announced this morning, energy – including fuel costs – will be rising to 28% of business costs over the next year. Diesel is the single biggest operating cost for logistics businesses, which drives all sectors of UK PLC. In the six months to 1 July 2022, diesel costs for operators rose by almost 50%”.
A Tough Yet Optimistic Future For UK Haulage?
No one knows for sure what the future holds for the UK’s haulage industry, or indeed for UK commerce as a whole. However, the fact that the government is introducing measures to make it easier for UK hauliers to operate should be welcomed. Could more have been done? Sure, but the concessions provided may point toward a challenging yet optimistic future.
At HGVC, we offer industry-leading HGV licence acquisition programs, and we are continuing to support the UK haulage industry through the instruction we provide via our nationwide network of training centres. Staffed by some of the most experienced trainers in the business, we are well placed to meet your needs, regardless of scale. If you would like to know more about how we operate, you should take a look around our website. There you’ll find lots of helpful information. Alternatively, to speak to us directly about your needs, either call 0330 818 8888 or click on ‘contact us’ and a member of our team will be delighted to help you any way they can.
