CommercialFleet

Road hauliers warned over consequences of fall in value of the pound

FTA

The post-Brexit fall in the value of the pound has meant road hauliers will have to demonstrate greater financial reserves to operate legally in the UK, warns the FTA.

Financial standing requirements - for standard operator licence holders, are stated in European law in Euros, and are reassessed every year according to the exchange rate on the first working day of October, but come into force on January 1.

Official figures will be announced by the Department for Transport in due course, but the FTA anticipates that the sums will change from £6,650 to around £7,800 for the first vehicle, and from £3,700 to around £4,300 for each subsequent vehicle. In January 2016 the equivalent rates fell from £7,000 to £6,650, and from £3,900 to £3,700.

Es Shepherd, head of member advice at the FTA said: “The potential hike may create difficulties for hauliers as they now need to demonstrate to the traffic commissioners – the industry regulator, that they have over 15% greater reserves available.

“The financial standing requirements exist to demonstrate to the Traffic Commissioner that a commercial vehicle operation is solvent, and ostensibly to show that they don’t need to start cutting corners in vehicle maintenance and safety in order to save costs.”

The financial standing rates for restricted operators are set by the DfT in consultation with the traffic commissioners, and do not usually changes year-to-year.

These currently stand at £3,100 for the first vehicle and £1,700 for each subsequent vehicle.

Financial standing is not a sum that has to be paid, but rather an indication that a business has such reserves readily and easily available.

Shepherd added: “The increase would come as a sudden shock to operators who will need to demonstrate these extra reserves by the New Year.

"While ‘cash at the bank’ is the most straightforward way of demonstrating compliance, other methods permitted by the Traffic Commissioners include joint and several guarantees, overdraft facilities, credit facilities and invoice finance agreements.”

Leave a comment for your chance to win £20 of John Lewis vouchers.

Every issue of Fleet News the editor picks his favourite comment from the past two weeks – get involved for your chance to appear in print and win!

Comment as guest


Login  /  Register

Comments

No comments have been made yet.

What's the tax liability on my van?

Calculate the BIK tax on any van on sale today with our van tax calculator

How green is your van?

Check out the CO2 emissions for new vans with our CO2 calculator?