DBT Information for FAC members - Duty Suspension Application Window

Fuel Duty The Government has confirmed today that the current freeze in fuel duty will continue for a further five months and will remain in place until September 2026. It is then proposed that the five pence cut that was first introduced in 2022 will be reversed through a staged process. From April 2027 it will then be uprated annually by RPI. This is a significant shift for the sector having experienced many years of fuel duty being held and the cost of this will need to be planned for over the coming years. As expected, as there has been a decline in fuel duty receipts generally following a switch towards hybrid and electric vehicles further measures have been introduced to counteract that, albeit that switch has focussed on the car market. Electric Vehicles The Government has announced that it is introducing Electric Vehicle Excise Duty (eVED) as a direct result of falling fuel duty receipts as drivers switch away from petrol and diesel vehicles. This will take effect from April 2028 but the good news for the sector is that this will only apply to cars and operators of other vehicles including vans, buses and HGVs will remain out of scope of the eVED for the time being. The reasoning appears to be that the adoption of electric vehicles in the sector is lagging behind that for private cars but it is clear to see the direction of travel as fuel duty receipts are forecast to continue to decline in the future. Vehicle Excise Duty will be increase by RPI for vans and HGVs from 1 April 2026. EV Charging An extra £100 million has been pledged by the Government for investment into the EV charging infrastructure, this includes workplace charge points. This is in addition to the £400 million of funding that was previously announced at the Spending Review in 2025. Capital Allowances A number of measures relating to capital allowances have been announced, which include maintaining the full expensing for plant & machinery in the year of expenditure which is to be welcomed. In addition to this a new 40% first year allowance will be introduced from 1 January 2026 which should have the advantage of covering assets used for leasing, albeit some minor exclusions will remain. This will be a welcome change where companies in the sector lease assets between members of a corporate group. This measure helps to level the playing field. The main rate of writing down allowances will be reduced from 18% to 14% from April 2026 but this should not adversely affect most businesses unduly where some form of 100% allowance has already been claimed either through full expensing or the Annual Investment Allowance. Low Value Impacts As a result of Brexit, the UK introduced a relief for customs duty and import VAT on imported goods with a value of £135 or less. Instead, VAT was due on the selling price only. Following consultation and due to a significant increase in volumes, the Government announced that the relief would be removed from March 2029, at the earliest. It was concluded that the low value imports arrangements had incentivised e-commerce cross-border trade to an extent that was never envisaged, resulting in non-compliance and distorting competition for UK e-commerce retailers. A new system of data and duty collection will now be developed for the industry and all imports will be subject to tariffs, as applicable. If you have any queries regarding the Autumn Budget, and how it could affect your business, please do get in touch with Menzies’ Transport & Logistics Team

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