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, according to the FTA.
Swannells – Warehousing Cambridgeshire
Financial standing requirements – for standard operator license holders, are stated in European law in Euros and are reassessed eery year according to the exchange rate on the first working day of October, but they don’t give into force until the 1st January of the new year.
Swannells – Warehousing Cambridgeshire
The FTA has predicted that the sums will go up to around £7,800 for the first vehicle, which would previously have cost £6,650. Each subsequent vehicle after that is likely to set you back around £4,300w which has risen from £3,700. Although these figures are simply predictions, the official figures will be announced by the Department for Transport fairly soon. In January 2016 the same rates fell from £7,000 to £6,650 and from £3,900 to £3,700
Head of Member Advice at the FTA, Es Shepherd, had this to say: “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 Department for Transport in consultation with the Traffic Commissioners and do not usually change year-to-year. Theses currently stand at £3,100 for the first vehicle with every subsequent vehicle costing £1,700.
Financial standing is not a sum that has to be paid, rather an indication that a business has such reserves if they need them.
Swannells – Warehousing Cambridgeshire
Ms Shepherd went on to say: “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.”
Swannells – Warehousing Cambridgeshire
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