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The 2025 UK Budget: What it means for haulage
Created: 10/12/2025
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Updated: 10/12/2025
The 2025 UK Budget arrives at a difficult moment for the road transport sector. Operators are working against rising wages and operating costs, tight margins, ageing infrastructure and ongoing pressures around recruitment. At the same time, the shift towards cleaner mobility is accelerating, creating new expectations and increasing the need for long-term investment.
The following article outlines what the Budget means for infrastructure, investment, workforce costs and the wider operating environment for haulage.
Infrastructure investments
For many years, fleets have been affected by deteriorating roads, weight restrictions on ageing bridges and the growing unpredictability of journey times. Government and industry data makes this clear. More than one in every ten miles of network in England and Wales is likely to require maintenance within the next year, according to Road Condition Index reporting, and the backlogs for resurfacing work continue to rise. These issues lead to vehicle damage, driver fatigue, higher insurance costs and disrupted schedules. They also place additional pressure on operators already dealing with narrow margins.
The new Budget acknowledges these concerns. One positive step is the substantial funding for strategic national projects, including almost £900 million allocated to the Lower Thames Crossing, which should reduce congestion, provide more reliable journey times and a safer driving environment for HGVs.
Local authorities will also receive a share of £2 billion specifically to improve roads and address the growing number of potholes. This could make a noticeable difference for fleets. Local roads carry the majority of domestic freight and serve as the first and last mile of nearly every delivery. Improving them should reduce wear and tear on vehicles as well as operational strain.
These commitments will not fix decades of underinvestment immediately, but they represent an important shift towards a road network that is more resilient and better suited to the realities of modern logistics.
Developing the workforce through apprenticeships
The Budget also places more focus on skills. Fully funded apprenticeships for under-25s working in small and medium-sized businesses could help attract new entrants into a profession that urgently needs them.
The driver shortage is well documented. The UK must recruit around 200,000 new lorry drivers over the next five years in order to stabilise supply chains, and across Europe the average age of professional drivers continues to climb. Only a small proportion of drivers are under 25, and training costs have been a barrier for many younger candidates.
Providing funded apprenticeships makes logistics more accessible at a critical time. It also supports smaller operators, who often struggle to invest in training despite needing to expand their teams.
Incentives for modernisation
The Budget introduces further support for investment, particularly around fleet renewal. Operators installing charging infrastructure can take advantage of a 100% first-year allowance until March 2027. This will help offset the upfront cost of electric HGVs and depot charging equipment.
From January 2026, a new 40% first-year allowance will be available on many main-rate assets, including trucks – particularly useful where full expensing or the Annual Investment Allowance don’t apply, such as some leased fleets and unincorporated operators.

Pressures on operating costs
While the Autumn Budget contains several positive measures, operators will also need to plan for increasing costs. Fuel duty will rise in stages between the end of August 2026 and March 2027. Fuel is already one of the largest expenses for operators, and the planned rises are likely to increase the emphasis on fuel efficiency, telematics, consolidated routing and fleet renewal.
Vehicle Excise Duty (Road Tax) will be uprated in line with inflation from April 2026, including for HGVs. From April 2028, a new Electric Vehicle Excise Duty (eVED) will also apply a mileage-based charge to battery-electric and plug-in hybrid cars, on top of existing VED. Although eVED initially excludes electric vans and trucks, it signals a longer-term shift toward distance-based taxation that fleets will need to factor into future planning.
The HGV Levy will also return to rising with inflation. Vehicles over twelve tonnes must pay the levy before using A roads or motorways, and the revised rate will add another cost that fleets must factor into forward planning.
Larger, higher‑value properties are also likely to feel more pressure from business rates changes. The Budget confirms permanently lower business rates for retail, hospitality and leisure, funded in part by higher charges on the most expensive commercial premises. These include big warehouses and distribution centres, so operators with large sites can expect proportionately higher bills over time than smaller depots or high‑street locations.
In addition, the Budget introduces several measures that directly affect the financial landscape for operators and the people who run or work within haulage businesses. Labour already represents one of the sector’s highest costs, and these changes will shape payroll planning, staff retention and the personal finances of many owner-operators.
Minimum wage increases mean that employers will face higher staffing costs across warehousing, last-mile logistics and support roles. Many operators have already tackled wage rises in recent years, and this further uplift will add pressure at a time when margins remain narrow. For fleets that rely on overtime, night work or seasonal peaks, the impact will be even more noticeable.
Rising administrative demands
The Budget continues the government’s move toward greater digitalisation of tax and reporting. Compliance expectations will grow over the coming years, with stricter penalties for late VAT and Self Assessment returns and an expanded Making Tax Digital framework from 2027. Mandatory electronic invoicing will follow in 2029.
Parcel carriers and mixed load operators will also be affected by changes to customs duty for low-value imports, which will apply to items worth less than £135 by March 2029 at the latest. While the aim is to even the playing field for UK manufacturers, it is likely to increase administrative pressure on haulage firms.
These changes may eventually improve efficiency, but they will require investment in systems and staff training. Smaller fleets without dedicated administrative teams are likely to feel the adjustment most sharply.
A mixed Budget
Although operators will face higher costs and increased administrative complexity, the 2025 Budget also provides some of the most significant commitments to the road network and skills pipeline seen in recent years.
Taken together, these measures signal a Budget that attempts to balance fiscal constraints with long-term needs. The road ahead will still require careful planning and strategic investment, but there are genuine opportunities to strengthen the sector’s foundations and support a more resilient future for haulage.
SNAP gives fleets practical tools to manage this shifting landscape, from parking access to data that supports compliance and operational decision-making. Sign up to discover how SNAP can help strengthen your fleet’s resilience in the months ahead.