Autumn Budget 2026: what hauliers face in July 2027

By Mark Skellum, Partner & CFO

The Autumn Budget did not take cost out of haulage. It moved it. The 5p fuel duty cut now runs to 30 June 2027, the window for the £1 HGV road tax closes the same day, and changes to capital allowances and Business Asset Disposal Relief land in the months either side. Fleet operators have roughly 8 months to reprice contracts, time vehicle purchases and settle exit plans before next summer’s bill arrives.

January is off the table

Before the Budget, the question on most transport managers’ desks was what January would cost. As of 28 October, the answer at the pump is nothing. The steps back up in fuel duty that were due to start in the new year have been cancelled, and the main rate stays at 52.95p a litre until 30 June 2027. The inflation increase that was pencilled in for next spring has been pushed back to the same date.

That matters more than usual this year. Diesel passed £2 a litre for the first time in early October, according to RAC Fuel Watch, up from around 142p at the end of February. Another 5p on top over the winter would have landed on businesses with very little left to give. The Road Haulage Association says 85% of operators in its recent survey reported reduced margins.

It is worth being clear about what the sector asked for and what it got. The RHA went into the Budget with 3 requests: freeze fuel duty, end the automatic link to RPI inflation, and introduce a 15p-per-litre Essential User Rebate for commercial operators. The freeze came. The RPI link stays and the rebate did not appear, so this is relief rather than a reset.

1 July 2027 is the date to plan around

On 1 July 2027, fuel duty returns to 57.95p a litre, the rate that applied before the temporary cut in March 2022, and is then uprated by RPI on top.

The numbers are not small. A tractor unit covering 100,000 miles a year at around 8 miles per gallon burns roughly 57,000 litres. At 5p a litre, that is just over £2,800 a year per truck before any inflation uprating is added. Across a fleet of 30, it is getting on for £85,000.

Unlike most cost increases, this one arrives on a single day. There is no gentle ramp. A fuel line that looks one way in the June management accounts will look quite different in July’s.

The £1 road tax comes back one renewal at a time

The £1 HGV vehicle tax rate, introduced on 1 July 2026, applies to licences taken out up to 30 June 2027. The Budget confirmed it but did not extend it. The government puts the saving at around £600 a year for a typical heavy lorry and £912 for the largest vehicles. The HGV Levy is a separate charge for vehicles of 12 tonnes and over, and it has been payable throughout.

Fuel duty goes back up in one step. Vehicle tax does not. Each truck returns to the full rate at its first renewal after the window closes, so the cost comes back across the fleet over the following 12 months, in whatever pattern the renewal dates fall. It’s worth mapping out when this will start to impact fleet costs.

"The cost has not gone away. It has a date on it now: 1 July 2027."

The full rate will also be higher than the one operators remember. HGV vehicle tax and the HGV Levy both rise with RPI from 1 April 2027. And for anyone tempted to stretch the holiday by renewing early, the Budget has closed that door: from 28 October 2026, where a keeper gets the reduced rate for more than 12 months, the excess can be recovered as a civil debt.

Put fuel and vehicle tax together and the illustrative figure for that tractor unit is around £3,400 a year, or more than £100,000 across 30 vehicles, before inflation.

Contracts signed this winter will still be running next summer

Most of the contracts agreed between now and the spring will run beyond July 2027. Any of them priced on today’s duty rate, with no provision for the change, will be underpriced for part of their life.

The fuel surcharge clause is the first thing to check. If it tracks a published diesel index and resets monthly, a duty rise will largely flow through. If it resets quarterly, works from a fixed baseline, or only moves once prices shift by a set amount, the operator carries the gap until it catches up. Vehicle tax and the HGV Levy never appear in a fuel clause at all. They sit in the base rate and need to be priced there.

Wage costs rise sooner. The National Living Wage rises by 3.9% to £13.21 an hour from 1 April 2027. Most drivers are paid above it, but warehouse, yard and shunting staff are often closer, and every increase at the bottom puts pressure on the differentials above it.

The April wage increase and the July fuel and tax step land within 3 months of each other. A rate agreed in December that allows for neither will be under real pressure for the second half of its term.

Vehicle purchases: check which allowance actually applies

The Budget raised the main rate first-year allowance from 40% to 50% for spending from 1 January 2027, and cut the main rate writing-down allowance from 14% to 12% from April 2027. It is easy to read the headline and assume new trucks have just become more tax efficient. For many fleets, nothing has changed.

Limited companies buying new vehicles already have full expensing, which gives 100% relief in the year of purchase, alongside the £1 million Annual Investment Allowance. The 50% allowance matters mainly to businesses that cannot use full expensing, such as partnerships and LLPs spending above the Annual Investment Allowance, and to leasing companies, whose costs may in time show up in hire and lease rates.

The new main-rate first-year allowance applies to qualifying new and unused plant and machinery. So used tractor units and trailers bought above the Annual Investment Allowance go into the main pool, which from April will be relieved at 12% a year rather than 14%. For operators who rely on the used market, or who have been holding on to older vehicles, relief has just become slower again.

Exit plans now have a deadline too

For family-owned haulage businesses thinking about a sale or handover, the change that will matter most sits in the capital gains rules. The lifetime limit for Business Asset Disposal Relief halves from £1 million to £500,000 for disposals on or after 6 April 2027. Gains inside the limit are still taxed at 18%, and gains above it at 24%. That is up to £30,000 in lost relief per person.

The government says 3 in 4 claimants will be unaffected. A business built over decades, with a freehold yard and a fleet, is more likely to sit in the other quarter. In conversations with family hauliers around the Midlands, the sale or succession question usually comes up as something for the next few years. This Budget has put a date on part of it.

There are transitional rules for contracts entered into before 6 April 2027 but not yet completed, and they need careful handling. Tax should never be the reason to sell. If a conversation is already under way, though, its timetable now matters.

What to do before next summer

None of this calls for drastic action. It calls for a handful of decisions made in the next few months rather than in June. Reprice contracts that run past July 2027 and agree how the duty change will be handled. Check what your fuel clauses track and how quickly they reset. Map vehicle tax renewal dates so the return of the full rate sits in the cash flow forecast rather than arriving as a surprise. Time vehicle purchases around the allowance that actually applies to your business. And if a sale or handover is on the horizon, get the timetable in front of your advisers well before April.

The Budget bought the sector time. Used well, that is worth more than another penny off the duty rate.

If you want a second pair of eyes on how next July lands in your own numbers, from contract pricing and fuel clauses to vehicle timing and exit planning, I’m always glad to talk it through. More on how we work with hauliers is on our haulage and logistics page.

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This article has been prepared for information purposes only. Formal professional advice is strongly recommended before making decisions on the topics discussed in this release. No responsibility for any loss to any person acting, or not acting, as a result of this release can be accepted by us, or any person affiliated with us.