How Are The Increasing Fuel Costs Affecting Businesses?

With the VAT increase on January 4, 2011, uShip wanted to better understand how this increase will impact the business of UK transporters. Over 5,000 uShip and Boxby transporters and couriers were surveyed in mid August.

Survey Highlights

• 5% feel their business will be more profitable over the next 12 months due to the VAT increase
• 53% feel the VAT increase will have a significant impact or threaten to put them out of business
• 60% feel extremely or somewhat disadvantaged by continental hauliers
• 93% feel the government continually underestimates or is ignorant when it comes to impact of taxes on the
• transport industry

Rising Fuel Costs

Questions (with percentage of respondents)

1. Are you worried about the VAT increase's impact on your business?

• Yes, it threatens to put me out of business. (17.8%)
• Yes, I feel significant uncertainty. (35.6%)
• Not much, my business has weathered worse shocks. (20.0%)
• No, this doesn't affect my business at all. (26.7%)

2. Does the increase in VAT give unregistered hauliers an advantage?

• Yes, unregistered hauliers will win business away from registered ones. (33.3%)
• No, the best customers are VAT registered and prefer to deal with other VAT-registered businesses. (13.3%)
• Don’t know, there are too many other factors. (53.3%)

3. Will you be able to pass on the VAT increase to your customers?

• Yes, I plan to pass on 100%. (40.0%)
• Only some of it; the rest, I will have to absorb. (11.1%)
• No, I will probably have to absorb 100%. (22.2%)
• I don’t know how much I will be able pass on. (26.7%)

4. In light of the VAT increase, how disadvantaged do you feel competing with Continental hauliers?

• I am extremely disadvantaged. (31.1%)
• I am somewhat disadvantaged. (28.9%)
• We’re on fairly even ground. (24.4%)
• I still have slight advantage. (8.9%)
• I still have significant advantage. (6.7%)

5. Does the government fully understand the impact of fuel tax and VAT increases on the transport industry?

• Yes, it carefully evaluates the impact of increased taxes on the transport industry. (6.7%)
• No, it continually underestimates the impact of these taxes on the transport industry. (42.2%)
• No, in fact, it seems to be ignorant of the consequences on the UK economy as a whole. (51.1%)

6. Does a VAT increase hit the transport industry harder than other industries?

• Yes, the transport industry is especially hard hit. (51.1%)
• No, every industry takes a comparable hit. (44.4%)
• No, other industries (retail, banking, etc.) are harder hit. (4.4%)

7. In light of the VAT increase, where do you see your business 12 months from now?

• It will be more profitable than it is now. (4.4%)
• It will be about the same as it is now. (55.6%)
• It will be less profitable than it is now. (24.4%)
• I think that it will have gone out of business. (15.6%)

Business Demographics

1. How many vans, lorries, or other vehicles does your company operate?

• 1 (47.4%)
• 2 (31.6%)
• 3 (10.5%)
• 4-10 (10.5%)
• 10 or more (0%)

2. How would you characterise your business?

• Owner operator/driver (60.5%)
• Small transport business (36.8%)
• Large transport business (0.0%)
• Brokerage or 3PL business (2.6%)

3. Is your company VAT registered?

• Yes (51.4%)
• No (48.6%)

4. Are most of your customers VAT registered?

• Yes (44.7%)
• No (39.5%)
• Don’t know (15.8%)