We understand the pressures that manufacturing and logistics businesses face. You might be handling tight margins while planning for investment in technology and skilled staff. You might also be dealing with supply-chain delays and rising operating costs.
Throughout the 2025/26 tax year, many companies in these sectors are taking a fresh look at how to manage financial challenges and seize growth opportunities. In this blog, we highlight common issues such as cashflow strains, supply-chain disruptions and increased energy bills, while also exploring how steps like automation, research and development (R&D) tax relief, and green investment can help you plan for the future with greater confidence.
Financial pressures in manufacturing and logistics
Both manufacturing and logistics operate in fast-moving and competitive markets. According to recent data from the Office for National Statistics (ONS), manufacturing contributed around 8.6% of the UK’s total gross domestic product (GDP) last year. Meanwhile, logistics underpins global supply chains. Any gaps or delays in supply networks can disrupt daily operations. Here are some core financial concerns that many businesses face.
- Cashflow management
Cashflow is a worry for many in these sectors. Lengthy payment terms from clients, high production costs and unexpected freight charges can lead to irregular income streams. Overdrafts and extended credit lines can help, but they also increase borrowing. When combined with everyday costs like wages and raw materials, you might find yourself juggling multiple expenses at once. - Rising overheads
As energy prices fluctuate and fuel costs trend upward, overheads for both manufacturers and logistics firms can rise sharply. The 2025/26 tax year sees ongoing changes that may affect your cost base. For instance, the main rate of corporation tax remains at 25% for many companies, depending on taxable profits. With energy bills also staying high, there is added pressure to invest in energy-efficient systems and processes. - Supply-chain disruptions
Global events, shipping blockages or sudden surges in demand can all trigger supply-chain bottlenecks. Manufacturers might find themselves waiting for key components to arrive, while logistics operators may have to re-route shipments at short notice. These disruptions can escalate expenses when you must pivot quickly or hold extra inventory.
Possible opportunities for growth
Although it can feel like there is limited room to manoeuvre, the manufacturing and logistics sectors also present opportunities for you to strengthen and expand.
- Automation and digital technology
Investing in automation can reduce errors, streamline production lines and free up your employees to focus on tasks that add more direct value. Logistics businesses can use software to track shipments in real time, improve fleet allocation and reduce fuel waste. While these investments demand upfront capital, they can result in measurable gains in productivity and profitability. If the capital outlay seems daunting, the annual investment allowance (AIA) can help you offset some of those costs against your taxable profits. - R&D tax relief
Innovation drives growth and R&D tax relief can help by providing a deduction on development expenses related to new products and processes. Manufacturers creating prototype designs or logistics companies trialling more efficient fleet systems, could qualify for R&D credits. Claiming these reliefs can reduce your overall corporation tax bill, which is especially important if your margins have shrunk. This is often an area where professional accountants can guide you through the application, ensuring you meet the criteria set by HMRC. - Green investment and sustainability
Rising energy costs and environmental concerns push businesses to consider sustainable practices. For example, installing solar panels, upgrading to fuel-efficient vehicles or switching to low-waste production methods can reduce long-term operational costs. Depending on the scope of your project, some green initiatives may also be eligible for enhanced tax relief or grant funding.
Professional accountants can support resilience and growth
We work with clients in manufacturing and logistics to spot improvements and plan for sustainable long-term growth. While it can feel overwhelming to balance production schedules and transport logistics with ongoing financial pressures, an accountant with specialist knowledge can provide more targeted support.
- Forecasting and budgeting
A robust financial plan goes hand in hand with realistic forecasts. We can help you prepare budgets that incorporate anticipated fluctuations in material costs, currency exchange rates and shipping fees. By stress-testing these figures, you can spot vulnerabilities before they become bigger problems. - Tax planning for the 2025/26 year
With the new tax year in progress, it’s wise to confirm you’re making the most of available allowances and reliefs. For instance, R&D incentives and enhanced capital allowances can significantly reduce your taxable profits if you meet the qualifying conditions. We’ll look at your business structure, your investments in equipment or R&D and your projected profits to suggest a tailored tax planning strategy. - Improved cashflow management
We know from experience that successful cashflow management relies on efficient invoicing, timely reconciliations and close monitoring of debtor days. Tools like automated invoicing and credit-control software can save you time and reduce errors. We can also recommend funding options that match your business model, including invoice financing and short-term bridging loans. - Advice on grant funding
Some government or local schemes offer grants or incentives for businesses that contribute to innovation, regional development or environmental goals. An accountant can help you pinpoint grants that you may not even be aware of. This additional funding can be a welcome boost when you’re aiming to invest in technologies or training.
Building a more robust business strategy
Financial information should be at the heart of all major decisions. A strategic plan that aligns your finances, operations and market goals can keep you on course during unpredictable conditions. We often help our clients identify key performance indicators (KPIs) that reflect production output, shipping costs and overall profitability. Tracking these KPIs is a simple way to know where you stand at any moment.
And when it comes to expansions or acquisitions, we can perform due diligence and scenario analyses so you can move forward with clarity. This might include evaluating credit facilities, assessing additional working capital needs and reviewing operational contracts.
The role of resilience in supply chains
Global and local events can shift demand overnight. Managing unexpected shortfalls in raw materials or last-minute customer requests calls for a robust supply-chain strategy. We’ve seen clients who expanded their supplier base or created contingency plans that rely on multiple carriers, which helped them adapt to sudden changes in shipping routes or labour availability. Having a clear, cost-effective supply chain that can absorb short-term shocks without pushing you into debt is a vital part of long-term success.
We can help
Manufacturing and logistics businesses have many opportunities to manage financial challenges more effectively. From harnessing automation and R&D tax relief to choosing the right funding options, you can create a more resilient operation that adapts to evolving markets. We’ll help you identify what matters most to you and plan for sustainable growth.
Need professional guidance on tackling financial challenges in the 2025/26 tax year? Get in touch with us today to see how we can support your business.
