Autumn Budget 2025: What It Means for Supply Chain and Logistics

Opportunities 

End of £135 De Minimis Threshold

The government plans to abolish the customs duty relief on goods imported into the UK valued under £135 by March 2029. This change could redirect supply chains through UK warehouses, encourage onshore fulfilment, and stimulate demand for domestic logistics space—creating jobs and boosting local operations. 

Investment Incentives

From April 2026, the Writing Down Allowance (WDA) main rate will fall to 14% (from 18%), and from January 2026, a new 40% first-year allowance will apply to qualifying expenses. These measures could accelerate investment in automation, delivering significant cost savings and efficiency gains. 

ESG Alignment and EV Infrastructure

While the Budget stopped short of aggressive net-zero targets, it reinforces the importance of ESG reporting and sustainability-linked investment. Commitments to expand EV charging networks support the transition to electric HGVs and delivery fleets. However, the introduction of Electric Vehicle Excise Duty (eVED) from April 2028—a pay-per-mile tax—may temper adoption rates. 

Relief for Smaller Warehouses

The additional 2.8p business rates surcharge will only apply to properties with a rateable value above £500,000, leaving smaller warehouses exempt. This could make compact, high-eaves sites and automation-driven layouts more attractive. 

Consumer Confidence Boost

By honouring pledges not to raise income tax, VAT, or National Insurance, the Chancellor may restore consumer confidence, potentially driving higher retail sales and, in turn, increased demand for logistics services. 

Threats 

Rising Labour Costs

From April 2026, the National Living Wage for those aged 21 and over will rise by 4.1% to £12.71 per hour. Combined with frozen tax thresholds, this will increase payroll pressure and may accelerate the shift towards automation. 

Fuel Tax  

Fuel duty will remain frozen until September 2026, after which the 5p cut will be reversed in three stages, followed by annual increases linked to inflation starting April 2027. 3PLs will face higher operating costs from late 2026 onward, so fleet efficiency and alternative fuel strategies will become more important. 

Business Rates on Larger Sites

A new surcharge from April 2026 will affect properties with a rateable value above £500,000—impacting over 1,900 warehouses. Multi-user sites and outsourced fulfilment hubs are likely to see cost increases, prompting contract renegotiations and potential consolidation into smaller facilities. 

Compliance Pressure

The adoption of UK Sustainability Reporting Standards (aligned with ISSB’s IFRS S1 & S2) from 2026 will increase audit complexity and require enhanced data systems, adding further cost and resource demands. 

Site Availability and Energy Costs

Planning reforms introduced in early 2025 have yet to deliver the expected benefits, limiting land availability for development. Rising energy costs—particularly for older, less efficient sites—compound the challenge, pushing businesses towards costly relocations or reliance on third-party logistics providers. 

Conclusion 

The Autumn Budget 2025 presents a dual narrative: opportunities for those ready to invest in automation, sustainability, and efficiency, and challenges for businesses facing rising labour, compliance, and property costs. At Hatmill, we believe proactive investment and strategic planning will be key to navigating these changes and unlocking growth.