Autumn Budget 2025: how it affects couriers

Every year, the government sets out its financial plans for the year ahead in what’s known as ‘the Budget’. It’s where major decisions are made about taxes, motoring costs, business support and public spending. For courier drivers and small transport operators, these changes can directly affect day-to-day running costs, take-home earnings and plans for growth.

The Autumn Budget 2025 includes updates that will influence everything from fuel duty and road tax to allowances for buying new vans, rules around digital invoicing and support for electric vehicles.

We’ve scoured the full 2025 budget from top-to-bottom, and identified the six major updates that’ll affect couriers, and provided tips for how to prepare for each change.

1. Fuel duty and motoring costs

Fuel is one of the biggest expenses for van drivers, and the 2025 budget confirms increases from 2026.

Fuel duty changes (2026–27)

Other key motoring points:

• Vehicle Excise Duty (road tax) will rise with inflation from April 2026.
• Combined, these changes mean rising running costs for van-based operations.

2. Buying or upgrading vans and equipment

Many couriers upgrade their vans regularly or add vehicles as they grow.

The 2025 budget offers several tax benefits to help with this.

Tax allowances at a glance

Why this matters:
Couriers planning a vehicle upgrade or shifting towards electric vans can benefit from lower tax bills if they time their purchases strategically.

3. Income tax and National Insurance

The 2025 budget freezes several tax thresholds, which affects both sole traders and limited company directors.

What’s changing

• Personal allowance will stay at £12,570 until 2031.
• Higher-rate threshold will stay at £50,270.
• NI thresholds are frozen at same levels.
• Dividend tax will increase from 2026–27, affecting those who pay themselves via dividends.

Impact for couriers:
As your income rises, more of it will move into higher tax bands — even without policy changes — leading to higher overall tax.

4. Compliance, admin and invoicing

More transport businesses are being pushed into digital record keeping, and the 2025 budget sets firm timelines for when this becomes mandatory.

Key changes

• A tougher penalty regime for late Self Assessment and VAT returns from April 2027.
• Making Tax Digital (MTD) will expand in 2027, meaning more couriers will need digital accounting software that records income and expenses in real-time.
• Mandatory e-invoicing for VAT-registered businesses from 2029, requiring invoices to follow a standardised electronic format.

What this means

Couriers will need compliant record-keeping tools, accurate digital books and seamless invoicing processes. For many self-employed drivers, this could add admin during an already busy year.

How SmartPay can help

SmartPay, available to every Courier Exchange member, already helps couriers prepare for several of these Budget-driven changes:

• Built-in courier VAT checks make it easier to stay compliant when sending or receiving invoices.
• Standardised e-invoicing through SmartPay helps you stay aligned with the upcoming 2029 requirements.
• One-click payments and automated reconciliation reduce manual admin and make it easier to maintain clean digital records ahead of Making Tax Digital.
• We’re already working with accounting software providers like Xero and Quickbooks to support MTD for Self Assessment when it launches, helping couriers keep everything in one place.

Together, these features help reduce the risk of errors, missed deadlines and avoidable penalties — something that will matter even more once the changes from the 2025 budget come into effect.

5. Electric vehicles and charging support

The 2025 budget includes new funding and incentives aimed at supporting the transition to cleaner vehicles.

What’s included

• £200 million for EV charging infrastructure across homes, workplaces and public sites.
• 10-year business rates relief for EV-only forecourts and chargepoints.
• A mileage-based tax will be introduced for electric cars from 2028 — but electric courier vans are excluded at launch.

Takeaway:
EV vans remain a strong option for urban courier work, especially as charging availability improves.

6. Business premises and depots

Some couriers run small depots, lockups or shared offices. The 2025 budget includes changes that may ease property-related costs:

• Extended Small Business Rates Relief for businesses operating from more than one site.
• Rates relief for installing EV chargepoints on commercial premises.

Why it matters:
It’ll become easier and more cost-effective to expand or run multi-site operations.

Other points to keep in mind

• Removal of customs duty relief on low-value imports (up to £135) by 2029 — relevant for international parcel work.
• HMRC are expanding real-time data checks for under-reported income.
• Possible future links between tax compliance and additional transport licences.

What couriers should do next

Here are practical steps you can take following the 2025 budget:

• Review your fuel budgets for 2026–27.
• Consider timing new van purchases to benefit from FYAs.
• Confirm your accounting tools are ready for MTD and e-invoicing.
• Explore EV options if you operate in low-emission or urban areas.
• Speak to your accountant about how frozen thresholds may affect your take-home pay.

How SmartPay helps you stay compliant — now and as rules tighten

With the 2025 budget introducing stricter digital reporting requirements, couriers will need tools that make compliance easy rather than adding more admin.

As a member of Courier Exchange you’ll get access to SmartPay, which has several features designed to support this:

1. Ready for Making Tax Digital

MTD for Self Assessment begins rolling out next year, and we’re working closely with accounting software companies so couriers can manage their records smoothly across both systems.

2. Built-in VAT checks

SmartPay verifies key VAT details during the invoicing and payment process, reducing the chance of mistakes that could trigger penalties under the new regime.

3. Standardised e-invoicing

With e-invoicing becoming mandatory for VAT-registered businesses from 2029, SmartPay already sends invoices in a consistent digital format that helps couriers stay ahead of the rules.

4. Easier reconciliation

One-click payments mean every invoice and payment is neatly matched, reducing errors and helping you keep clean, accurate books.

5. Less manual admin

Because SmartPay tracks invoice statuses, payment approvals and payment dates automatically, couriers spend less time on spreadsheets and more time earning.

Together, these tools support compliance, reduce admin pressure and help you stay ahead of the upcoming changes — without needing to completely overhaul how you work.

Budget 2025 FAQs