How The Fuel Crisis Could Affect Your Business

The UK has been experiencing one of the worst fuel crises in living memory, eclipsing the panic buying sprees of 2005 and 2007. After many media outlets reported of a possible fuel shortage on Thursday 23rd September 2021 and Friday 24th September 2021, the whole of the UK saw lengthy queues at petrol stations. Many have attributed the crisis to Brexit and the shortage of HGV lorry drivers caused by the end of freedom of movement, however the government claimed that there wouldn’t have been a shortage of fuel if the public hadn’t panic bought and stockpiled.

Figures from the RAC showed the average price of petrol rising from 135.9p on Friday to 136.6p on Sunday, the highest it’s been since 2013. HSBC UK reported that fuel payments increased by 50% from the same day a week earlier, the largest spike in recent memory. Simon Williams, the RAC’s fuel spokesperson, stated, “When it comes to pump prices, it is a pretty bleak picture for drivers. With the cost of oil rising, wholesale prices are being forced up, which means retailers are paying more than they were just a few days ago for the same amount of fuel.”

We break down what the fuel crisis means for businesses across the UK, and what are the potential knock-on effects to the workplace and the wider economy.

 

Why The Fuel Crisis Happened?

It is estimated that there is a shortage of over 100,000 lorry drivers in the UK, causing huge logistical problems in the supply chain for not just fuel but also food and essential items. Many HGV drivers were from European countries and have since returned home or moved elsewhere as freedom of movement ended in Britain, as well as the COVID-19 pandemic hitting. Since the panic buying began on Friday, it is reported that between 50-85% of petrol stations outside of the motorway network have run out of fuel.

With many HGV drivers retiring also, a huge backlog of HGV driving tests have yet to be completed due to the pandemic. On average it takes 6-8 weeks to go through the necessary HGV driver training, testing and acquiring a licence before qualified drivers can hit the road. As a result, the government announced it will offer temporary visas to 5,000 foreign fuel tanker and food lorry drivers, as well as 5,500 poultry workers in a bid to ease the strain of disruption around Christmas.

The government have also announced the army have been called on standby to help petrol stations out with demand and deliver fuel. HGV licences have also been extended, as well as over a million letters sent to drivers who hold a HGV licence encouraging them to return to the industry as an emergency procedure. Competition law between oil firms has also been temporarily suspended by the government, allowing fuel suppliers to share information and work together to reduce further disruption.

 

How Fuel Affects Your Business?

Fuel affects businesses in many ways. If you use your own vehicle or vehicles for work, you may be able to claim tax relief on the approved mileage rate. This covers the cost of owning and running your vehicle (it does not include travelling to and from your work unless it’s a temporary place of work). To work out how much you can claim for each tax year you’ll need to:

  • keep records of the dates and mileage or your work journeys
  • add up the mileage for each vehicle type you’ve used for work
  • take away any amount your employer pays you towards your costs, (sometimes called a ‘mileage allowance’)

The approved mileage rates to claim back are as follows:

First 10,000 business miles in the tax year –

  • Cars and vans – 45p
  • Motorcycles – 24p
  • Bicycles – 20p

Each business mile over 10,000 in the tax year –

  • Cars and vans – 25p
  • Motorcycles – 24p
  • Bicycles – 20p

You can also claim tax relief on money spent on fuel and electricity for business trips in a company car. Keep records to show the actual cost of the fuel. If the employer reimburses some of the money, it is then possible to claim relief on the difference. The advisory fuel rates for company cars can be found here.

 

What Are The Potential Consequences Of The Fuel Crisis?

The obvious repercussion from the fuel crisis is that many workers will be unable to travel to and from work due to not having the fuel reserves. Many fuel providers, including BP, Shell and Esso, Petroleum/ExxonMobil, Wincanton and Hoyer Petrolog UK, all predict that the fuel crisis will end in a matter of days.

A joint statement from the oil companies stated, “There is plenty of fuel at UK refineries and terminals, and as an industry we are working closely with the government to help ensure fuel is available to be delivered to stations across the country. As many cars are now holding more fuel than usual, we expect that demand will return to its normal levels in the coming days, easing pressures on fuel station forecourts. We would encourage everyone to buy fuel as they usually would. We remain enormously grateful to all forecourt staff and HGV drivers for working tirelessly to maintain supplies during this time.”

Before the fuel crisis, the government hinted at the prospect that a return to work from home requirements could be enforced as the winter months hit and the strain on the NHS is likely to increase again with COVID-19. The fuel shortage could boost the possibility of this, enabling many workers to work remotely if their jobs allow them to do so. To avoid the fuel crisis having even more drastic effects, digitalisation is crucial for businesses. We’ve seen during the pandemic the acceleration of digitalisation, especially through cloud technology where everything can be accessed under one platform, from both a consumer and an operative side. Implementing digital processes into the systems and approaches of your business enables any disruptions to be kept to a minimum.

In terms of the wider economy, the fuel crisis is likely to have significant ripple effects due to the rapid disruption on fuel supplies inevitably leaving many small businesses, health workers and drivers unable to do their jobs. On top of this, the recent news that energy prices will rise will undoubtedly see lower income families and businesses suffer. This is also predicted to trickle down to household grocery prices, potentially leading to a rise of 4% inflation topping warned the Bank of England, as the colder months beckon.

 

We hope this has outlined to you the scale of the fuel crisis and the effects it could have on your business. If you require any further information on cloud accounting, economic impacts from an advisory point of view, or anything accounting related for that matter, please don’t hesitate to get in contact with us at Nordens where one of our trusted advisors would be happy talking you through your query.

 
Beyond Accountancy

At Nordens, we're more than just accountants - we're business experts who can help you achieve your biggest goals.

Nordens Strategic

Our specialist strategic division at Nordens boasts some of the leading entrepreneurial business minds in the country. We cater towards delivering consistent success stories, whilst helping businesses achieve above and beyond their initial goals.

Through highly-tailored guidance, coaching and advice, Nordens Strategic are able to define exactly how your business can reach new levels of success.

Regardless of how you define ‘success’ for your business, our strategic service is guaranteed to bring about real and lasting change. By partnering with some of the UK’s top business coaches, we’ll steer you along the path to a greater future.

Accounting 2 You

Every business, no matter how big or small, needs to make the right decisions, and how to best manage your accounts can put huge question marks over your business. Accounting2You is here to take that pressure off and provide you with all the answers you need.

Our bookkeeping branch offers a fully inclusive, comprehensive service that you can trust. Since 2005, our specialist bookkeepers have been successfully managing the accounting of both individuals and small businesses.

With experts in payroll analysis, credit control and financial recording, Accounting2You will lead your business efficiently, and with real purpose, towards a prosperous future.

Voted as EXCELLENT - 9.9 out of 10 based on 167 reviews

<
Chris Dyer

Director - Metro Bank

Nordens are always very easy to deal with and extremely professional and efficient. I would have no hesitation in recommending them to my clients for their accountancy needs, no matter how complex they may be.

Read more reviews on Trust Pilot

Jamie Brown

Co-Founder - Chicmi Limited

Very good to work with - the team go above and beyond to make the accounts easy and efficient. They're all super friendly and a joy to work with.

Read more reviews on Trust Pilot

Simon Rose

Director - Rose Opticians

I have been using Nordens Chartered Accountants for 5 years and very happy with the service provided. All members of the team are very knowledgeable and have a wealth of experience which has proved very beneficial to my organisation

Read more reviews on Trust Pilot

Rebecca Bossick

Founder & Director - Physio LDN

Very easy to contact and put me in touch with the right person whenever I need to ask any questions. Extremely knowledgeable and can help me manage my various businesses whenever I need.

Read more reviews on Trust Pilot

James Aconley

Principal - Pauline Quirke Academy

Great accountants, always available to offer advice. The team have transformed my business.

Read more reviews on Trust Pilot

Christopher Wilce

Founder - Dataphone

Having worked with Nordens over the last 5 years, not only to look after my annual accounts but they have also provided outstanding professional advice. They have guided me through a Company share buyback with clear and objective advice. We have also been using Nordens strategic services for a couple of years, which has helped bring about significant improvements that exceeded my expectations. With experience of working with several local accountants over my 29 years in business, I’m very pleased with the service I have received from Nordens.

Read more reviews on Trust Pilot

Dave Hodges

Director - Linekers

Trusted our business with Nordens for over 10 years now and watched the company grow into the successful innovative business it has become today. Deservedly so. Every aspect of financial advice we need is always given promptly and with a smile. We have total confidence in all aspects of advice Nordens give. If you are looking for accountants, its a no brainer!

Read more reviews on Trust Pilot

Tony Charles

Founder - Foundation Sports Limited

A fantastic, modern, vibrant firm that care about the clients and their staff in abundance. It is rare to find an Accountancy firm with such vibrance and focus and relationships. It is no wonder they win award after award in their field.

Read more reviews on Trust Pilot

Peter Horlock

Managing Director - Prime Time Boilers

I have been with Nordens for many years now and they are a great accountants.

Read more reviews on Trust Pilot

Simon Cushing

Founder - Vivid Finishes

We have used Nordens for the last 5 years and have had a great service throughout. The guys are very passionate about what they do and have played a part in the growth of our company, highly recommended.

Read more reviews on Trust Pilot

Andrew Martin

Managing Director - AMD Interior Architecture

Great Service at Nordens from a friendly very approachable team Particularly Kirsty Willis and Joe Sword who have been helping us since we started the business in 2016.

Read more reviews on Trust Pilot

James Robinson

Director - Forma London

Nordens provide a first class service. We moved to Nordens last year and have been impressed with the level of service provided. Keep up the good work!

Read more reviews on Trust Pilot

>
Latest News

We've always got our ears to the ground when it comes to interesting, useful and topical information relating to business and accountancy.

The Autumn 2021 Budget…
The Chancellor of the Exchequer, Rishi Sunak, will be carrying out his red briefcase and laying out his Autumn Budget plans on Wednesday 27th October 2021. The Autumn Budget doesn’t usually attract massive attention, however du...
5 Reasons Why Your…
Much has been made regarding the rise of digitalisation in most sectors in the UK, however one thing which isn’t covered extensively is the benefits of hiring a Virtual Assistant (VA). VAs are essentially a service which provid...
Nordens TV

We love making videos that break down convoluted accountancy jargon into plain-talking, actionable and accessible facts.

Live Webinar – Time…
Watch our latest LIVE webinar titled ‘Time To Revive' that was held on Wednesday 3rd February 2021 at 4pm GMT hosted by our CEO Mitch Hahn. Last year was tough for all of us. Now is the time to see what 2021 brings and how we c...
Our Christmas Message To…
Merry Christmas to all!   Here we have Mitch Hahn, CEO of Nordens Chartered Accountants delivering our Christmas message to you. Click the video link or read the full transcript below.   As we enter the ho...
  Why I Founded Nordens
Accounting 2 You

In November 2002, having sold our other business interests off earlier in the year, I decided to set up Nordens Chartered Accountants. The easy part was knowing how to do it, as I had established and built a smaller practice a few years earlier. The difficult part, for me, was not following the traditional accountancy path. Having run businesses, both successfully and unsuccessfully, I wanted to help business owners resolve their short term problems and work with them to achieve their longer term goals. Business has always been my interest and I love that I can help business owners achieve what seems like the impossible every single working day.

Mark Norden Signature

Mark Norden
Founder

We're Professionally Certified

Our limited company accountants have a range of qualifications from The Institute Of Chartered Accountants (ICAEW) to the Association of Chartered Certified Accountants (ACCA). We worry about the bye-laws, regulations and ethical guidelines of the ACCA so you don’t have to! That makes us an ACCA-accredited employer as well as a Professional Passport-accredited one!