Fleet cost reduction: 10 instant changes that can save you money

Rising operational costs are a pressing concern for corporate fleet managers in 2022. When looking at fleet cost reduction, there are many ways that businesses try to cut back. However, many of these can yield less than satisfying results. Our top 10 tips on how you can reduce your fuel costs, which consider both short and long-term adjustments, are:


1. Analyse fleet costs
2. Manage maintenance
3. Replace old vehicles
4. Optimise fleet structure
5. Track fleet data
6. Manage staff
7. Evaluate routes
8. Encourage economical driving
9. Track superficial vehicle condition
10. Use fuel cards

How can fleet costs be reduced?

1. Analyse fleet costs


The key to fleet cost reduction is planning and data collection. To make sure fleets are running as efficiently as possible, fleet managers need to know the full details of their fleet’s outgoings. A good method to measure this is to work out the total cost of ownership (or TCO) for each vehicle. To work out a vehicle’s TCO, fleet managers will need to calculate:


1. The procurement cost: The purchase price, leasing fees, and interest rates together all make up the complete procurement cost.
2. The lifetime costs: These include the money spent on fuel, tax, and insurance. Fleet managers will also need to consider the vehicle’s value depreciation.
3. The maintenance costs: This consists of routine and ad hoc charges, including MOTs and parts changes, as well as any unexpected breakdowns.
4. Area and route fees: These are charges to scrutinise if a vehicle operates in an area that accrues fees, such as congestion charge zones or if they pay regular toll fees as part of their routes.


Once fleet managers have calculated their fleet’s TCO, they can identify any areas or vehicles in need of further attention. After this analysis, they can work to budget effectively and reduce fleet costs using the following strategies.

2. Manage maintenance


Additional fleet maintenance and care may seem counterintuitive when it comes to saving money. However, caution and diligence with vehicles will lead to reduced downtime and increased fuel efficiency. Faulty parts, such as clogged fuel injectors or worn tyres, can lead to greater fuel consumption, negatively affecting your fleet cost management and increasing the likelihood of breakdowns.


A common issue that fleet managers are currently experiencing is the widespread MOT delays due to the large backlog after COVID-19. This has left MOT providers with limited availability. A way to avoid vehicles being off the road while they wait for an appointment is to schedule them more frequently. Vigilant fleet managers are now opting for an MOT every 8 months instead of every 12, giving them some wiggle room and preventing downtime. A complimentary approach is to schedule MOTs alongside other maintenance to be as cost-effective as possible.


Another example of spending to save is the use of premium fuels. Although they come at a higher price point, the occasional use of premium fuels that contain cleaning solutions, such as Shell’s V-Power or BP’s Ultimate, can increase a fleet’s longevity and fuel efficiency by cleaning out fuel injectors.

Replacing fleet vehicles

3. Replace old vehicles


With regular maintenance and monitoring of vehicles, it becomes apparent when they are no longer cost-effective to keep. When it is time to replace older vehicles, fleet managers should consider the depreciation figure and lifespan for the replacement models, as this will help cut down the overall TCO. They should also look at past fleet vehicles that have given a good return and use this data as an asset to reduce their procurement expenses.

As we also move closer toward carbon-neutral fleets, fleets need managing in a new way. The UK is not far away from seeing the lifespans of diesel and petrol vehicles cut short by their infrastructural phasing out. Fleet managers can transition to carbon-neutral options on a larger or longer scale to assist in fleet cost reduction. Currently, electric vehicles typically have a more expensive upfront cost but are cheaper to maintain. Although, this may change as they become the dominant vehicle type.

4. Optimise fleet structure


For fleet managers, it is important to continuously develop and improve a fleet’s structure. A streamlined fleet, with deliberately chosen vehicles, is much more efficient than one preserving an outdated framework.

When in the process of selecting new vehicles, there is an opportunity to look at the fleet structure and potentially choose more conservative vehicles. Namely, if it is appropriate to downsize parts of the fleet to boost fleet cost reduction. For example, if staff are now carrying less or lighter equipment, a smaller vehicle may be a valid option for them, those with lower mileage may be better suited to a petrol vehicle, or alternative arrangements, such as vehicle sharing or adopting grey fleet vehicles, may be best for those with especially low mileage.

5. Track fleet data


Accurate data and analytics, such as telematics, have many benefits for fleets. Advanced data collection leads to optimised routes, informed fuel purchasing decisions, and better road safety among drivers, all of which lead to fleet cost reduction. With telematics, there is the additional advantage of dashcam footage, which can save your company in costly legal fees should an accident occur.

6. Manage staff


Unclear leadership and low levels of staff support can lead to poor morale, diminished performance, or even high turnover rates. Within widespread fleets, it can be easy for drivers to feel isolated and like they are not part of a team.

Rather than fleet costs being spent on recruitment, it is better practice as a manager to value and prioritise your current team. By working to make staff feel motivated and connected, managers will notice an improvement in most facets of their business and fleet. Read our tips on how to best manage drivers here.

To save on spending, you can also encourage staff to make more economical decisions regarding their fleet usage. For example, office-based staff who regularly travel for meetings could replace a portion of their travel with virtual meetings.

Evaluate Routes

7. Evaluate routes


Along with using fuel cards, one of the most prudent ways to save on fleet costs is to stay informed on where vehicles will get the best refuelling rate, which is often a changeable detail.

When you choose fuel cards from Fuelmate, we give you access to our online portal and journey planner, which is an advantageous resource for fleet managers. With our journey planner, you can find the most cost-effective route for your drivers and save your fleet money on unnecessary detours. With our detailed invoices, you can also see where your drivers have been refuelling and what you could be saving.

8. Encourage economical driving


Efficient driving is one of the best ways to reduce fleet costs. As mentioned previously, uneconomical driving habits lead to increased fuel consumption and safety risks. By using telematics, fleet managers will be able to assess which drivers may need further training, and promote the following practices among drivers:

• Removing excess weight from fleet vehicles,
• Driving smoothly instead of braking or accelerating harshly,
• Avoiding unnecessary speed,
• Avoid idling,
• Where possible, such as when slowing down or on a decline, using engine speed as opposed to continued acceleration,
• Moving up gears at about 2000 rpm,
• Skipping gears where possible.

Track Vehicle Condition
9. Track superficial vehicle condition

A common complaint with communal cars, such as pool cars, is that staff members will leave them in a poor condition for other drivers. Often, we have seen fleet managers have to frequently pay to valet vehicles because of drivers leaving them in a subpar state. Another issue is that damage caused to vehicles while on the road, even superficial, can lead to end of contract charges when a lease agreement expires.

A way to reduce these expenses is to create a level of accountability for staff. This includes a clear and consistent assessment of vehicles before and after staff drive them. This can be a task that staff can complete when they are first taking the vehicle and when they return it via a form or checklist, either physical or digital. Some fleets include QR codes linked to online forms with their pool car keys, so that staff have easy access.

Using Fuel Cards

10. Use fuel cards


Fuel cards are a popular and effective way for fleets to save money on fuel as well as make their administration and budget tracking simple. When compared to the national average, fuel cards can offer an attractive discounted rate and, as well as refuelling, can be used for a range of fleet items, such as AdBlue.


Here at Fuelmate, we offer a range of fuel cards that cover all of the UK’s major fuel networks to improve your fleet cost reduction and management. Our team of trained fuel experts will select the best fuel card solution for your business based on your fleet’s requirements. Our invoices supply you with advanced and itemised data that will help you to assess your fleet’s fuel usage for further savings opportunities. To find out more about how a fuel card can save you money, click here, or get in touch with our team to start your fuel card journey today.

Fleet Management Trends in 2022

So far, 2022 has been an immensely challenging year for those operating fleets. One of our top fleet management tips is to learn to adapt to the current environment and a large part of doing so is keeping up to date with the industry. In this post, we explain the biggest fleet trends and adversities that fleet managers have been discussing throughout the year. The top fleet management trends from 2022 so far have been:

• Increased operational costs
• Moving to electric vehicles
• Microchip shortages
• Cyber-attack concerns
• Grey fleet
• HGV driver shortage
• Increased interest in telematics


Below, we explore these topics in more detail and give advice for fleet managers moving in the third quarter.

Fleet Trends

Increased Operational Costs

Increased operational costs


The worrying and exponential rise in operating costs is the most popular talking point among this year’s fleet management trends. Fuel prices have risen throughout the year. In March, oil reached its highest price since the 2008 recession. This rise has seemed to temporarily plateau recently, but further increases are likely as we look ahead.

The rise in prices is due to a variety of factors. The most impactful has been the invasion of Ukraine by Russian forces. Russia was one of the world’s largest exporters of oil and supplied much of Europe before the invasion. Afterwards, countries began to introduce sanctions against Russia. This has affected the global supply of oil and raised costs, as well as put a strain on availability.

The effects of Brexit have also seen prices and time needed for importing and exporting goods increase this year. These delays have caused unwelcome strain for fleets and those in the freight and transport sectors.
As a result, the cost of most resources that fleets depend on has shot up.

David Legg, director of tyres at the i247 Group has said “We’ve seen manufacturer price increases due to cost rises across materials, logistics, labour, and fuel. These increases are then coupled with a significant change in the fleet mix where we are seeing larger rim sizes and new, more expensive tyre technology to accommodate an increasing number of SUVs and electric vehicles.”

Unfortunately, as most are aware, this is one of those issues that does not have a simple answer. A recession is looking increasingly likely as the economy struggles to right itself. On our blog, we have recommended diverse ways businesses can save money where they can. For those wanting to keep up to date with the oil market, our director, Andy Smith has a weekly update. This update, Fuel for Thought, breaks down the week’s oil market news and what it could mean for customers.

Electric Vehicles

Moving to electric vehicles


When it comes to fleet trends, one of the most longstanding topics has been the 2030 ban on new diesel and petrol vehicles. In 2022, this incoming ban has seen fleet managers ramping up their efforts to introduce eco-friendly options to their roster.


Previously on our blog, we have discussed the alternatives available on the market, such as HVO and hydrogen. HVO offers a great in-between for ICEs. Hydrogen, however, looks to be the future of heavy-duty, time-pressured, transport such as HGVs. Even so, the industry discusses these options less than their more readily available counterpart: electric vehicles.


Electric vehicles are the main alternative fuel source supported by the UK government. As such, we have seen infrastructural developments for EVs such as grants and nationwide charging points crop up over the past decade. This has led to electric vehicles being a pertinent talking point when looking at fleet management trends.


Even though there have recently been issues in vehicle supply chains, we are still seeing an increase in the number of electric vehicles purchased. In April 2022, EVs had a 10.8% market share, compared to their April 2021 figure of 6.5%.


Initially, the switch to EVs encountered trepidation from fleet managers. However, the transition so far has been going smoother than expected. FleetNews reported that only 20% of fleet managers operating EVs saw rises in the cost of maintenance. When comparing this to the fact that 44% of fleet managers expected increases in maintenance costs during the switch, it raises hopes for a painless changeover.


Even though the target for the UK to hit net zero by 2050 appears a good distance away, it would be prudent for fleet managers to look into their fleet’s options for making the switch. This will ensure a smoother transition. However, fleet managers will need to be aware of our next fleet trend.

Semiconductor Shortage

Microchip shortage


At the end of 2021, the global auto industry saw an output of 1.5 to 5 million vehicles shorter than planned. This has had a knock-on effect on fleets and fleet management trends everywhere, as vehicle supply has been sparse.

The main part that has been causing this issue is the semiconductor. Semiconductors are a vital part, used in lights, safety features, navigation displays and speedometers. The pandemic heavily affected the supply chain for semiconductors, which is taking longer to recover than hoped. The lack of this crucial part has seen vehicle lead times increase from 6 months to 9 months and over.

Also straining supply chains is the lower output from vehicle manufacturers, who shrank their production last year following reduced global requirements. As is the story for many manufacturers post-pandemic, they have struggled to keep up with the now vastly increased demand.

Thankfully, semiconductor production looks to be picking back up and is on track to be at a sustainable level over the next few quarters. In terms of vehicle manufacturers, there may still be a strain on fleets looking for new vehicles in the short term, but improvement in the long term is likely. Arval’s CEO Alain van Groenendael has said that their “N°1 mission in 2022 will be to help and support our clients overcoming the delays in new vehicles deliveries and in their energy transition”.

In the short term, fleet managers would be wise to extend the life cycles of their current vehicles and place orders for new vehicles earlier in anticipation of longer lead times. Using telematics to stay on track with your vehicle maintenance and reduce downtime or breakdowns is a terrific way to keep your vehicles moving while you work to update your fleet.

Cyber-Attack Concerns

Cyber-attack concerns


In May 2022, the fleet software firm Digital Innk warned fleets about the dangers of cyber security breaches. Various popular fleet news sources, such as FleetWorld and Business Motoring, shared this warning. This saw cyber security become a much-talked-about fleet management trend for companies across the UK.

A government survey prompted Digital Innk’s concerns. The survey, conducted between winter 2021 and early 2022, investigated the processes and approaches to cyber security for businesses to inform future policies. The key findings of the survey show that the percentage of businesses facing cyber-attacks has held steady between 2021 and 2022 at 39%.

Even though this figure is lower than 2020, which saw 46% of businesses facing cyber-attacks while employees were working from home, it is still a soberingly high number.

Endorsing strong cyber security is important for all businesses but especially in the context of fleets. As fleets use technology such as telematics and delivery planning software, protecting both your drivers’ and your customer’s data is an essential requirement.

The CEO of Digital Innk, Angela Montacute, advised businesses to update their fleet’s technology to the latest software to make sure their digital security can cope with newer dangers. “Cyber-attacks bring operational issues and the risks of reputational and financial damage,” she said. “Fleets should take action to ensure the digital platforms they use to interact with customers, suppliers and internally are secured with the latest technology.”

As well as keeping technology up-to-date, it is wise to review company procedures and implement regular training for the workforce about the dangers of phishing, suspicious downloads, and general online safety.

Grey Fleet

Grey fleet


As operating costs continue to rise, businesses are now looking toward the benefits of grey fleets. Grey fleets, in which employees use their private vehicles for work purposes, also rose in popularity after COVID restrictions ended in 2021. Employees, who previously had used public transport before the pandemic, no longer felt comfortable doing so. Instead, staff began to drive themselves and have their fuel usage subsidised by their employer.

We are again seeing grey fleets become a fleet trend in 2022 as they can remove the expenditure from buying and maintaining vehicles such as pool cars. Grey fleets are not an option for every journey or every fleet, but for those using smaller vehicles for shorter range and less regular trips, they are a viable way to save your company money.

For those deciding to include more private vehicles in their fleets, it is important to ensure that all vehicles used are still legal and safe. Remember that employees will also be feeling the pinch and may hold off on repairs or maintenance as a result. In July, FleetNews found that 6.4% of 3,000 grey fleet vehicles assessed had illegal tyres.

It is also worth noting that using private vehicles can diminish the ability to collect accurate data from driver journeys. It is harder to track mileage without the help of telematics, which can make it harder to see where you can save money by planning your staff’s routes or choosing the most cost-effective refuelling points.

As long as well-constructed processes are in place that ensure vehicles are safe, a grey fleet is a good option for businesses that have infrequent low milage trips to save money on purchasing vehicles.

Driver Shortage
The HGV driver shortages


Fleet managers often discussed the HGV driver shortage at the end of 2021, a fleet trend that has persisted through 2022. Fortunately, the shortage has been showing the first signs of easing after government initiatives and media campaigns aimed at bringing fresh drivers on board.


In late 2021, the UK was short of over 100,000 qualified HGV drivers. This came as a result of factors including driver retirement, poor rates of driver retention, an enormous backlog of HGV driving tests caused by COVID lockdowns, and Brexit causing EU nationals who were working as HGV drivers to relocate. All of this, combined with the already present shortage of 60,000 drivers caused countless issues and delays within the transport industry.


In September, the government laid out thirty-three actions to try and increase the number of LGV drivers in the workforce. These included launching training schemes and boot camps, increasing the number of HGV driving tests by 90%, and introducing temporary visas for EU nationals working as HGV drivers. Some of these actions have been more successful than others, the government scrapped their temporary visa scheme in February after only attracting a proportionally small number of drivers compared to their target.


There has also been a media push to change the image of the HGV driving sector, encouraging more women to consider it as a career path. Recently, the BBC released its new show Queen of Trucks, showing the behind-the-scenes of women working in the sector.


For fleet managers operating HGVs in need of drivers, although recruitment is a factor, driver retention has much more of an impact on driver numbers. Creating a rewarding environment for your workforce should be a top priority for fleet managers wanting to avoid losing staff. Read our tips on how to be a successful manager for your drivers here.

Fleet Trends and Telematics
Increased interest in telematics

At Fuelmate, we have seen an increase in interest this year in the benefits that telematics can provide. Telematics is an invaluable tool for fleet managers.

This is especially the case in the current climate where fleets are dealing with higher fuel costs and lower vehicle availability. Telematics can help fleets reduce fuel costs by monitoring their drivers for problematic habits that burn unnecessary fuel such as harsh braking or driving in the wrong gear. It can also keep you alerted to when your vehicles are requiring maintenance, which can help stretch out vehicle lifespans in the wake of longer vehicle lead times. If you are interested in telematics, or other cost-effective and convenient fleet solutions like fuel cards, contact us today.

If you would like to stay informed about fleet trends and news, make sure to keep up to date with our blog. You can also follow us on social media, such as Facebook, LinkedIn, or Twitter for regular updates. If you are searching for advice and guidance on fleet management and different management styles, check out our comprehensive guide to fleet management today.

Hydrogen lorries: Will fleets use them?

Is the future really electric or are there some creditable alternatives being developed? For fleet managers, electric vehicles are often presented as the only option for the future of fleets. However, this is unlikely to be the case. There are many alternative fuels in development as we prepare for the ban on the sale of new petrol and diesel vehicles in 2030. Previously, we have discussed HVO as a potential option but fleet managers should also evaluate if hydrogen-powered vehicles could form a part of their future fleet profile. Hydrogen-powered vehicles are currently seeing an increase in interest as the technology has seen huge steps forward in recent years. So, are hydrogen-powered HGVs viable for fleets?

How do hydrogen HGVs work?


There are a couple of ways that HGV engines can be structured to use hydrogen as a fuel. For example, hydrogen combustion engines operate similarly to regular internal combustion engines (ICEs). There are also hydrogen fuel cell engines, which are the most prominent option in development.

Hydrogen fuel cells use electrochemical reactions to create usable power for a variety of applications and sectors. When applied to engines, a fuel cell is quite like a battery, except that it creates its own electricity from fuel instead of needing to be charged.

Hydrogen fuel cells use both hydrogen and oxygen to power the motor of the vehicle. The process works as follows:

Step one

A fuel cell is made up of a cathode, an anode, and an electrolyte membrane.

Hydrogen fuel cell step two

Oxygen travels to the cathode of the fuel cell. Meanwhile, the hydrogen atoms travel to the anode, where they are split into protons and electrons.

Hydrogen fuel cell step three

The hydrogen electrodes go through a circuit, generating heat and electricity. 

Hydrogen fuel cell step four

The hydrogen protons, now positively charged, travel through the electrolyte membrane.

Hydrogen fuel cells step five

When the electrons have travelled through the circuit and the protons have travelled through the membrane, they meet at the cathode and react with the oxygen to create water/H2O.

How do hydrogen fuel cells work?

The only by-products of hydrogen fuel cells are heat and water, with no carbon emissions. This makes them an exciting option to add to the UK’s transportation network ahead of 2030. So, what do we need to consider when looking at the possibility of adding hydrogen lorries to our fleets?

Won’t fleets be using electric vehicles?

Hydrogen-powered HGVs are currently in development worldwide as the technology plays catch up to electric vehicles. For fleet operators, the option of incorporating hydrogen HGVs will potentially circumvent some of the worries that have been raised by the switch to EVs.


Even with the vast development of the UK’s electric vehicle network, there are still major doubts about if EV technology will be able to support heavier fleet and transportation activity. This is mainly due to the shortened ranges that EVs have before needing to refuel when compared to diesel vehicles. The length of time needed to recharge EVs is also a concern as it will potentially cause delays for drivers.

What could hydrogen fuel mean for HGV fleets in the future?


It was recently announced that Tevva, an Essex-based company, has added a hydrogen fuel cell to their electric HGV design, to support the battery and ensure there is a backup in case the vehicle runs out of charge on the road, increasing its range to 310 miles. This is an important milestone as it marks the first hydrogen-powered vehicle to be designed and manufactured in the UK, showing strides forwards in the technology and its commercial ability.

Volvo Trucks is also in the process of testing a zero-emissions HGV powered by a hydrogen fuel cell, which is reporting a range of up to 1,000km (621 miles) and a refuelling time of 15 minutes. At the rate of their current testing, this HGV would be on sale in the latter half of the decade.

In terms of the wider future of hydrogen-powered HGVs, Element Energy Ltd carried out a study to “provide costs, efficiencies and roll-out trajectories for zero-emission HGVs, buses and coaches” back in 2020. Their prediction regarding hydrogen-powered LGVs (referred to in the study as FCEV or Fuel Cell Electric Vehicles) was that, by 2050, hydrogen-powered vehicles would not be as cost-effective as electric vehicles due to the infrastructural support behind EVs. However, they have posited that “FCEV refuelling is easier to manage than BEV (Battery Electric Vehicles) recharging, and some operators may be willing to pay a cost premium for the vehicles to save driver time and operational complexity.”

When asked about the future of hydrogen-powered fleets, Roger Elm, President of Volvo Trucks, said “My clear message to all transport companies is to start the journey today with battery-electric, biogas, and other options available. The fuel cell trucks will be an important complement for longer and heavier transports in a few years from now.

Mixed fleets do look to be the way forward as we leave fossil fuels behind. Electric cars will no doubt make up the majority of fleet vehicles in the future as they’re a perfect option for company cars. Meanwhile, larger transport vehicles, such as HGVs, and more time-poor fleets will likely turn to the advantages of hydrogen-powered lorries.

In the meantime, HVO is also a great option for those wanting to bridge the gap and cut down on CO2 usage as we move over to carbon neutral options, as many diesel vehicles do not need any alterations to use it as fuel.

Image of lorry shape in trees from above

Advantages of hydrogen-powered lorries


With hydrogen lorries looking on their way to becoming a viable option for fleets by the end of the decade, it’s important for fleet managers to spend the run-up researching the possibilities of the technology to decide if it’s right for them. There are 5 main benefits to consider when thinking about the future of hydrogen-powered HGVs:


1. The reduction in carbon emissions. The only by-products would be water and heat.


2. Fuel cells are much quieter than combustion engines as there are no moving parts, leading to much quieter roads and working environments for your drivers.


3. Hydrogen can be refuelled quickly. As opposed to electric battery-powered vehicles, which need to be charged for long periods of time, hydrogen fuel cells just need to be refilled.


4. Hydrogen fuel cells convert energy more efficiently than traditional combustion engines, so you get more power and distance for the same amount of fuel.


5. Hydrogen fuel cells give HGVs a greater range than electric vehicles.

Disadvantages of hydrogen-powered lorries


However, there are also drawbacks to using hydrogen for fleets. Most of these disadvantages are due to hydrogen vehicles being in the relatively early stages of their development. These include:

1. A current lack of investment in the infrastructure needed for hydrogen vehicles to be viable for fleet usage. Political support would be needed to make sure the UK is able to offer adequate refuelling points, grants, or vehicle options for hydrogen HGVs.

2. As there is currently very little infrastructure for hydrogen vehicles, this will limit the number of places that hydrogen-powered vehicles can be repaired.

3. To be used as fuel, hydrogen needs to be extracted from water using electrolysis, which can be expensive due to the materials needed for this process. The expense needed to create hydrogen fuel will bump up the cost for consumers.

It is worth noting that, if hydrogen-powered fleets see the same level of rollout as electric vehicles, more issues with commercial use may come to light.

When looking at the future of fleets, it can be overwhelming to consider which option may be right for you. As we get closer to the government’s deadline, it is looking more likely that large fleets will use a mix of fuel sources past 2030. If you would like a consultation regarding your fleet operations, including a detailed invoice analysis to break down your current fuel usage, get in touch with our team today.

What has been the impact of Brexit on small businesses?

Since Britain left the EU in January 2021, there have been challenges and complexity within the UK’s economy. For some time, small businesses have been fighting to find ways to save money and adapt to the new landscape.


CityAM’s research on the effect of Brexit on SMEs found that:

• 64% of UK SMEs believe that Brexit has negatively impacted the UK’s economy.
• 25% said that it had affected their business directly.
• 19% have considered closing their business during Brexit.
• 20% did not think their business would survive Brexit.
• 46% are worried about the future of their business.


Previously, it’s been difficult to separate the effects on small businesses caused by Brexit from those caused by the pandemic. However, a year after the lift of the UK’s nationwide lockdowns, the economy is now revealing the ramifications. As a result, we are now able to make more sense of the impact of Brexit on small businesses.

Impact of Brexit on small business


The main issue that Brexit has caused for small businesses is the complications it has created within supply chains.


When the UK was a member of the EU, the bureaucracy involved in moving goods between countries was minimal and more cost-effective. As the UK is now separate from the EU, much more paperwork and tax are now required to move supplies from one to the other, which has increased processing time and costs for shipments.


This “red tape” has vastly affected the number of trading relationships that businesses in the UK have been able to maintain. According to the Centre for Economic Performance, the number of buyer-seller relationships has fallen by almost a third since January 2021. This has a waterfall effect on not just the businesses themselves, but everything within the market. Multiple studies have found that Brexit increased food prices by 6% across 2020 and 2021.

impact of Brexit on small business

Has Brexit affected the UK economy?


Members of the Government, such as Rishi Sunak, have insisted that the impact on trading cannot be solely attributed to Brexit, as the pandemic caused a dramatic fallout within the UK economy and its ability to trade. However, as countries worldwide are recovering from the effects of the pandemic, the UK is falling behind.


The Organisation for Economic Co-operation and Development has predicted that the UK economy will grow by 3.6% this year and 0% next year. This will move the UK from its position as the second-fastest growing economy in the G7 group (which also contains the US, Canada, Germany, Japan, France, and Italy) to the slowest.

Although most global economies have seen slowed growth due to the impacts of the Russian invasion of Ukraine, it’s notable that this estimation places the UK’s future growth below countries such as Germany, also in the G7 group, which has previously used a much larger percentage of Russian gas and oil. In fact, the UK is predicted to have the lowest growth of any major economy apart from Russia.

Even if this cannot be attributed to Brexit alone, the negative effects on trading caused by Brexit will add further strain to small businesses adjusting to the current economy and the raised cost of living.

Delays to Import Controls


As evidence of how much the UK economy is a concern right now, and how Brexit may cause more strain for businesses, the UK has now also further delayed the implementation of the import controls between itself and the European Union.


The date has been continuously pushed back due to concerns about the ports’ ability to operate with the new regulations alongside COVID restrictions and, more recently, the impact of rising fuel costs and the cost of living crisis, which is hitting the UK particularly hard.


These regulations are now due to come into effect at the end of next year, which has caused widespread frustration for businesses and ports that had already invested to make sure they were able to meet the requirements.

Will SMEs suffer more than large businesses during Brexit?


Although Brexit’s impact will be felt by the entire UK economy, there is a disproportionate effect on small businesses when compared to their larger counterparts.


The increased paperwork and costs for shipping take up a larger percentage of resources for small businesses than for larger ones. Many larger businesses have also moved some of their operations to Northern Ireland, which is still able to follow some EU customs regulations, to avoid these costs. This is an option that is not available to businesses with smaller budgets, fewer resources, and fewer assets.

Small Business Brexit

What can small businesses do?


Researching SME support grants


The UK government has introduced some support for small businesses, including a £20 million support fund for SMEs. Small businesses can apply for support grants of up to £2000 to help them adapt to new customs and tax rules. The government is especially encouraging SMEs that trade solely with the EU to apply for these grants. Businesses must import or export goods between Great Britain and the EU to be eligible.


Mike Cherry, National Chairman of the Federation of Small Businesses has stated:

“The vast majority of UK small firms that do business overseas trade with the EU. Not only are they trying to stay afloat as lockdowns gradually ease, they now have new, unfamiliar paperwork and costs to navigate when they buy from, or sell to, Europe. That’s why we asked the government for targeted funding to help them navigate these fresh demands, and it’s brilliant to see that funding go live today. We encourage all eligible small businesses to take a look and apply for this new source of help.”


Although this fund and its implementation have been criticised, it is recommended for eligible businesses to consider applying for this support.


To become more resilient to the current turbulent climate, small business owners may wish to consider keeping themselves aware and forming vital connections.

Being aware of the economic climate around a business’s specific sector is more important than ever and will allow business owners to make pragmatic decisions about their operations. Following as many reputable news sources as you can for your industry is also recommended, as well as following more general news sources that provide advice for SMEs. Joining business networks and associations will also enable business owners to pool resources and offer advice to one another.

Re-assessing your business model and suppliers


Depending on your infrastructure, it may also be worth considering if any changes can be made to your business model to adapt to the new environment, such as in your procurement operations. Whether this is through redirecting production efforts to products or services that are more in demand or more cost-effective to supply, or exploring additional revenue streams, many small businesses are shifting their focus to cope with Brexit.


To try and minimise the impact of Brexit on small businesses, business owners should also look at ways they can save money. If you’re a small, fuel-dependent business, an excellent way to save money and time for your fleet is to use fuel cards designed for small businesses. These often offer discounted rates when compared to the national average.


For those worried about the impact of Brexit on small businesses, who would like guidance when it comes to their expenditure, our fuel cards come with a dedicated account manager and an online portal. From your portal, you can watch over your company’s entire fuel spend, rather than pooling over receipts and invoices. If you are interested in using fuel cards to save your small business money in the wake of Brexit, get in touch with our team for a free-of-charge fuel spend analysis. Find out more here.

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