Lorry charge to hit large fleets

30 April

UK operators running more than 50 trucks could end up paying millions more in vehicle excise duty as part of the Government’s plans to bring in a lorry road user charge.

In its response to a Department for Transport consultation on the new charge, the British Vehicle Rental and Leasing Association has suggested that the government needs to re-examine its impact assessment.

The DfT wants to level the playing field for UK and foreign hauliers by introducing a charge of up to £10-a-day for lorries of 12 tonnes and over. UK operators will pay the charge as part of their annual VED transaction, but the government plans to neutralise the impact by reducing the VED part of the bill to compensate.

The DfT has already admitted that EU laws governing minimum VED rates will mean that 6% of UK operators will face an extra cost of up to £79 per vehicle, per year.

However, the BVRLA believes that fleets currently benefitting from reduced pollution certificates (RPCs) – which provide a reduction of up to £500 in annual VED per vehicle – could end up paying millions more.

To get round the EU laws on minimum VED rates, the DfT wants to replace RPCs with a new grant. The BVRLA understands that a separate EU state aid law will mean that operators with fleets of more than 50 RPC eligible vehicles will not be allowed to receive these grants.

The association estimates that the additional cost for its members alone could be nearly £4m per year.

“The DfT is trying to work around EU law and introduce this new charge in a way that targets foreign hauliers without costing UK operators,” said BVRLA chief executive John Lewis.

“Unfortunately, its over-complicated tax workaround looks like having some rather unpleasant cost implications for operators of large HGV fleets.”

In its response, the BVRLA has suggested that the government could in addition put a cap on the amount of fuel trucks are allowed to bring into the UK from abroad. This would ensure that vehicles using UK roads have paid fuel duty for the privilege.

Elsewhere in its reply, the association raised its concerns with enforcement of the lorry road user charging scheme. The DfT has not set out what additional enforcement budget will be provided to the Vehicle and Operator Services Agency (VOSA) or the level of penalty for non-compliance.

“If the scheme is not robustly enforced it is likely that foreign hauliers will chance their arm and risk a fine rather than pay the charge,” added John Lewis.

“Through our informal discussions with the DfT they have indicated the penalty could be around £100. We have suggested that a £1,000 fine is more likely to be a sufficient deterrent to ensure this does not happen.”

You can find the BVRLA's full response to the consultation here.

About the BVRLA:
The BVRLA is the UK trade body for companies engaged in the leasing and rental of cars and commercial vehicles. Its members provide short-term rental, contract hire and fleet management services to corporate users and consumers. They operate a combined fleet of around 2.5 million cars, vans and trucks, buying nearly half of all new vehicles sold in the UK. Through its members and their customers, the BVRLA represents the interests of more than two million business car drivers and the millions of people who use a rental vehicle each year. As well as lobbying the government on key issues affecting the sector, the BVRLA regulates its members through a mandatory code of conduct.

For more information:
Toby Poston – Head of Communications
toby@bvrla.co.uk
tel: 01494 545700
mob: 07979 756533

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