Tuesday, June 22, 2010

UK Budget Holds No Surprises For Freight Trucks And Shipping

Fuel Duty Rises Stay - Port Rate Reductions as Expected
Shipping News Feature

UK – Chancellor George Osborne had no real news for the freight and shipping industry, other than the expected. While there is no new rise in fuel, the phased introduction of the previous budget’s increase means duty will rise by 1p in October and by 0.76p in January 2011. It rose already by 1p in April. The Road Haulage Association were quick to express their dismay, “This is disappointing”, said RHA Chief Executive Geoff Dunning. “It will simply further widen the gap between UK diesel duty and that of our EU competitors, the unfairness of which was acknowledged in the Coalition’s recent programme for Government.

“We offer our support for the investigation into the feasibility of a fuel duty stabiliser and for the reduction of small business tax to 20 per cent from next year.

“We are concerned about the reduction of the investment allowance for small firms to £25,000 from £50,000 which will have a detrimental impact small haulage companies. The recognition of the importance of capital spending, not least on our international trade routes is welcome but we remain concerned about the future of investment in roads in the short to medium term”, he concluded.

A brighter note was the coalition had made good on their promise with confirmation that the rates previously levied on port side operators, which caused financial turmoil for many as we reported here from March, will be abandoned with the abolition of outstanding backdated bills.

Other factors affecting the shipping and logistics sector was the usual melange of tax changes, VAT going up to 20% aligning it with much of Europe in January 2011, Corporation Tax down 1% per annum for four years to finally reach 24% and Capital gains Tax up 10%, not the anticipated leap to 40% that many predicted but a more reasonable 28% with various riders. This however will seemingly be avoided by those entrepreneurs who sell their businesses as the threshold of only 10% for such transactions will move from £2 million to £5 million.