There are rumours that the Chancellor may look to increase Fuel Duty in next week’s Budget as part of his drive to plug the UK’s current £3bn deficit. Couple this with today's call for pollution tax on sales of new diesel cars in Britain and the potential impact this could have on small businesses throughout the UK should not be ignored.
Over the last 18 months, British SMEs have enjoyed some of the lowest diesel pump prices in almost a decade, freeing up cash for investment in vital equipment and the capacity to drive growth.
Global oil prices are now rebounding after hitting a low of $28 a barrel in mid-January, with prices above $40 a barrel at the time of writing. That rally may or may not continue, but we certainly can see the benefit to small businesses of keeping Fuel Duty at its current level.
Comments from the industry include
The Federation of Small Business says, “Maintaining fuel duty at its current rate would therefore provide a significant boost to small business confidence and stability.” The Freight Transport Association also points out that “for every penny fuel duty goes up, it costs truck and van operators around £100 million in a full year.”
LDF have provided finance to SMEs throughout the UK for over 30 years. We appreciate the level of change currently affecting the transport industry, from new legislation and transport costs to a growing focus on emissions. This new change is likely to add further pressure to businesses relying on transportation as a key operational requirement.
There are solutions however...
Leasing for major equipment investments is a great way to make sure unexpected cost increases don’t become a barrier to growth. Rather than funding major purchases from existing cash flow, businesses can choose to spread the cost of investments, into a predictable monthly sum.
Additionally, LDF’s new Business Development Loan can assist businesses to streamline ‘soft’ costs such as, marketing, training and recruitment, which were historically difficult to finance. In spreading these costs however, we aim to support businesses to make the most of their cash flow, freeing up resource to be utilised in other business areas.