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How does the new UK HGV levy affect your company?

By now you might have learnt that on 1 April 2014, a new levy will be introduced in the UK. Named HGV (Heavy Goods Vehicle) Levy, this new charge is imposed on all foreign trucks weighing over 12 tonnes. Below we will inform you about this new levy and its implications for the continuity of your transport company.

Another new levy, why?

The process leading up to the introduction of this new levy in the UK gave rise to many questions, mainly concerning the necessity for the British government to impose an additional road tax in order to be cost-neutral. In the view of the British government, this extra revenue, originating mainly from heavier vehicles, is required to restrict the wear and tear of the UK road network infrastructure  and to accelerate renovation of this infrastructure. It is estimated that foreign trucks will be contributing an extra amount varying between 640 en 1,000 pounds per truck each year.

The distinction between the UK and Europe

The basis of the problem originates in the difference between foreign and inland (UK) transport companies. Under European legislation, a country, being the UK in this case, may not discriminate among road users. The envisaged imposition of this new charge on foreign hauliers with trucks over 12 tonnes exclusively, amounting in fact to an annual number of roughly 130,000 trucks driving through the UK, would imply a difference in costs for inland and foreign hauliers. As this would be impossible, introduction at first appeared unfeasible.

The solution

The British authorities have come up with a solution that will remove the distinction between inland and foreign haulage companies. As of 1 April 2014, the new HGV Levy will be imposed on all trucks over 12 tonnes, so including ‘home’ trucks. The main difference however is that, in the end, UK-based haulage companies will not find (90% of) this increase back on their bills. This is because the new HGV Levy will be deducted from the Vehicle Excise Duty for UK-registered trucks. The eventual implication is that, unlike UK-based hauliers, foreign haulage companies will indeed pay this increase.

How does the levy affect your business?

The effects on your transport company may be twofold. There is no need for you to take action if you operate UK-registered trucks. In that case, the HGV Levy will be offset automatically with the VED. Operators of EU-based trucks are required to buy additional vignettes, available from various sales channels. If, however, you would prefer to maintain a clear overview of your fleet expenses by receiving these records on an invoice originating from a single provider, you can also purchase your day, monthly or annual vignettes using our fuel card and also through an online portal as from 17 March 2014. In this way you will at least be assured of optimal cost control.


 

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