A review of the Autumn budget for SMEs and shipping

The UK’s recent Autumn Budget 2024 brings several key changes for SMEs, particularly those involved in logistics and global shipping. Some measures offer cost-relief, while others could increase operational expenses.

Explore these key takeaways below:

 

Fuel Duty Freeze and Relief for Logistics

The freeze on fuel duty, including a continued 5p reduction per Liter, will help SMEs dependent on vehicle fleets and shipping, hopefully reducing the impact of rising transportation costs. This measure could benefit businesses with significant fuel use, such as logistics and delivery firms, supporting cost management amidst general inflationary pressures. Optomistic businesses will expect to see a reduction in cost themselves from carriers in the UK.

 

Employer National Insurance Contribution (NIC) Increases

From April 2025, NICs will increase to 15% with a lower threshold of £5,000, putting added financial strain on SMEs. The government has doubled the Employment Allowance to £10,500, which will exempt some smaller employers from NIC payments, but the overall hike could challenge SMEs with larger workforces. For those exporting or managing domestic distribution, this could mean re-evaluating workforce size or costs associated with employee benefits.

 

National Minimum Wage Increase

A 6.7% rise in the minimum wage is also set for April 2025, raising it to £12.21 for adults over 21. While beneficial to employees, this wage boost could increase payroll costs for SMEs, particularly in industries like retail or hospitality, which employ larger numbers of lower-wage workers.

 

Corporate Tax and Investment Reliefs

The government plans to maintain the headline Corporation Tax rate at 25% and continue full expensing policies for qualifying investments. This may assist SMEs investing in productivity improvements or expansion, especially those relying on advanced equipment or logistics technology to compete globally. These incentives encourage SMEs to invest in digitalisation and efficiency improvements, which could help mitigate rising labour and operational costs.

 

Infrastructure and Freeports

The budget promises long-term investments in infrastructure and the expansion of Freeports, including the creation of five new customs sites. Freeports offer tax and duty advantages and can support SMEs in sectors like manufacturing and logistics by reducing costs and enhancing access to new markets.

 

Increased Administrative Responsibilities

New requirements are emerging, such as the need for payroll software to manage benefits reporting by 2026. These changes, along with extended PAYE responsibilities for temporary staff, increase compliance obligations for SMEs, especially those utilizing flexible staffing models.

 

These measures show a mix of support and additional costs, suggesting that SMEs may need to adjust workforce and cost management strategies to navigate the 2024 budget's impact effectively. By leveraging investment incentives and planning for workforce costs, SMEs involved in domestic and international shipping can better manage these changes.

If you are looking for a supportive shipping partner that can work with you to build an effective strategy – get in touch with us today!

0203 600 6006

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www.londoneasttransport.co.uk

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