- 4 October 2016
- Transport / Logistics Services
The Freight Transportation (FTA) say that road hauliers may need to show greater financial reserves in order to continue operating in the UK.
Under current regulations, financial standing requirements are reassessed according to the exchange rate every October with new requirements taking effect from the following January.
Though the UK Department for Transport has yet to announce the new figures, the FTA believes that following Brexit the sums will increase from £6650 to around £7800 for the first vehicle and from £3700 to £4300 for each subsequent vehicle.
Ed 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 figure is not a sum that needs to be paid anywhere but rather an indication that a company has such reserves easily and readily available.
Shepherd continued, ‘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.’
Subscribe to Newsletter