Budget 2026 for Hauliers: Fuel Duty, £1 HGV VED and Wages

The Budget on 28 October 2026 landed in a year when diesel went from about 141p a litre in February to just over 200p in October. For a haulier, the questions are simple: what changes to fuel, vehicle tax, wages and tax relief, when does each change bite, and what should the office do before Christmas so that 2027 does not start with a cash surprise.

This guide sets out the Budget 2026 measures that matter to hauliers, with the dates, the figures we could confirm on GOV.UK, and a short list of actions for renewals, pricing and cash planning. Where a detail comes from trade press rather than an official page, we say so.

Fuel duty and red diesel: the cuts run to 1 July 2027

The Budget 2026 document confirms that the government is cancelling the plan to add 5p back onto fuel duty from January 2027 and is extending the cut by a further six months to 1 July 2027. The planned RPI increase is also deferred to the same date.

The duty rate on diesel is 52.95p a litre, as shown in the duty column of the government's weekly road fuel prices data. That is the rate you should be using in costings until July 2027. Fleetpoint reports that, without the extension, duty would have risen to 55.95p in January 2027 and 57.95p in March 2027.

The pump price is still the bigger problem. In the same official data, the UK average diesel price was 140.82p in the week of 2 February 2026, 200.04p in the week of 12 October and 198.58p in the week of 2 November. The four September weeks averaged about 192.5p. The duty decision stops things getting worse on 1 January. It does not take you back to February.

Red diesel keeps its 3.7p duty cut to 1 July 2027, which matters for reefer units and yard plant that can legally use it. The Road Haulage Association asked for a 15p a litre essential user rebate; trans.info and Fleetpoint both report that the Budget did not include it.

The £1 HGV VED rate and the 12-month safeguard

The temporary £1 vehicle tax guidance says the £1 rate applies to eligible HGVs (tax classes 1, 2, 16, 23 and 57) taxed between 1 July 2026 and 30 June 2027, and that vehicles taxed before 1 July 2026 do not get a refund. The Budget keeps this holiday in place to 1 July 2027. We covered the basics in our guide to the temporary £1 vehicle tax for HGVs.

The new element is a safeguard. Deloitte's Budget summary and trans.info both report that, from 28 October 2026, where a keeper obtains the reduced rate for more than 12 months, the excess benefit may be recovered from the keeper as a civil debt. At the time of writing we could not find a GOV.UK page setting out exactly how the 12 months will be measured. The practical message is plain: do not plan renewals around stretching the £1 rate beyond a year per vehicle. If you are unsure about a specific vehicle, ask DVLA or your accountant before you tax it.

Treat the £1 rate as temporary money, not a permanent cut. Your 2027/28 costings should assume full HGV vehicle tax returns for renewals after 30 June 2027.

Wages: National Living Wage £13.21 from April 2027

The government has accepted the Low Pay Commission's recommendation that the National Living Wage will rise by 3.9% to £13.21 an hour from April 2027, a 50p increase.

Most HGV drivers are paid above that rate, so the direct effect often falls on yard shunters, warehouse staff, cleaners, apprentices and office juniors. The indirect effect is larger. When the floor moves, the gap between a yard role and a class 1 driver shrinks, and drivers notice. Budget for pressure on driver rates in spring 2027 even if nobody on your payroll is on the minimum.

Capital allowances if you buy trucks

The Budget keeps full expensing for companies. Table 6.1 of the Budget document lists two changes: the main rate first-year allowance rises to 50% from 1 January 2027, and the main rate writing-down allowance falls to 12% from April 2027.

If you buy rather than lease, or you have a large pool of older vehicles, the timing of a purchase across 2026/27 and 2027/28 could change your tax position. That is a conversation for your accountant, with your replacement plan in front of you, before you sign for the next tractor unit.

Budget 2026 for hauliers: the measures at a glance

What to do now: renewals, pricing and cash

Example (fictional figures): Calder Freight runs six artics, each using about 3,000 litres of diesel a month. Had duty gone up by 5p in January, its fuel bill would have risen by 18,000 litres x 5p = £900 a month. That £900 has been avoided until July 2027, but it is a deferral. Calder also employs two yard staff on the minimum, each working 40 hours a week. The 50p rise adds about £2,080 a year in basic pay before employer costs. Small numbers on their own. Together with fuel, they are worth a conversation with every customer.

Here is a short routine for the office:

• List every HGV tax renewal date. Note which vehicles have already been taxed at £1 and when each will next fall due. Make sure nobody renews a vehicle twice in the window by mistake.
• Mark 1 July 2027 in the diary. Fuel duty, red diesel and the £1 VED rate all change around that date. Your rate reviews and fuel surcharge should be ready before then, not after.
• Check your fuel surcharge base. If your surcharge was set when diesel was near 140p, it is not doing its job. Our guide to building an HGV fuel surcharge formula shows how to tie it to a published index.
• Re-cost your main lanes. Use current diesel, the April 2027 wage floor and full VED from July 2027. The method in our haulage job costing guide works well for this.
• Book an accountant review before buying or disposing of vehicles across the January and April 2027 allowance changes.
• Hold back the VED saving. If the £1 rate saved you a few hundred pounds per truck, keep it aside for the renewals after June 2027 rather than spending it on running costs.

Frequently asked questions

Does the Budget 2026 cut the price of diesel at the pump?

No. It stops a 5p duty increase that was planned for January 2027 and keeps duty at 52.95p a litre until 1 July 2027. Pump prices still follow wholesale costs, which is why diesel sat close to 200p in October and early November 2026.

Can I get the £1 HGV vehicle tax rate for more than 12 months?

The GOV.UK guidance describes the rate as covering 12 months for vehicles taxed between 1 July 2026 and 30 June 2027. Trade summaries report that, from 28 October 2026, any benefit beyond 12 months may be recovered as a civil debt. Check with DVLA or your adviser before planning renewals around it.

When does the new National Living Wage start?

The £13.21 an hour rate starts in April 2027. It applies to workers aged 21 and over, so check yard, warehouse and office roles as well as any apprentices moving up an age band.

Did hauliers get the RHA essential user rebate?

No. The RHA asked for a 15p a litre rebate, and trade press reports that the Budget did not include it.

Where HauliK fits

HauliK does not change your tax bill, but it helps you see the dates and costs the Budget affects. The Checks plan holds vehicle tax, MOT and insurance dates with expiry alerts, so each truck's VED renewal sits in the fleet management register rather than in someone's head. The Fleet plan adds fuel logs against each vehicle, which gives you real litres and spend to put into your costings.

On the Ultra plan you can raise invoices from delivered jobs and track aged debt, useful when you are putting new rates and surcharges through to customers. See the haulage invoicing software page, or try HauliK with a 14-day free trial and no card needed.