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Recent reports have indicated that within a year, most hauliers will have to pay an additional 20% toward the HGV Road User Levy.
The announcement, made last week by Transport Minister Jesse Norman, details the planned hike. It will target over half of all UK-registered pre-Euro VI trucks.
Taken in context, 56% of Euro V-and-earlier HGVs will be hit with the increase; those hauliers will have to pay an extra 20% toward the road user levy.
Conversely, those running Euro VI trucks will benefit from a 10% reduction in their levy charge.
What is the HGV Road User Levy?
The levy applies to HGVs of 12 tonnes or more. The levy total depends on several factors as listed in the Gov.uk site. These factors are vehicle weight, axle configuration and levy duration.
The intention behind the levy is to combat road damage and limit pollution. Because newer lorries (Euro VI) emit 80% less NOx (nitrogen oxide) than older wagons, the State has incentivized hauliers to kit out their fleet with new lorries (or new engines in old lorries) with a 10% reduction in their levy charge.
Hauliers who do not modernize their fleets will be penalised with a 20% hike in levy expenditure. This could have a profound impact on domestic and foreign operations alike.
Regarding UK-based firms – the DVLA will collect their payments, which they must make concurrently with their Vehicle Excise Duty (VED).
As for overseas firms, they must make their payment before they enter the UK. Operators can investigate payment rates by visiting the Gov.uk levy guide.
HGV Road User Levy: Industry on the back-foot
The announcement has rattled the road freight sector; the RHA has been particularly vocal in its opposition.
RHA chief executive Richard Burnett expressed dismay at the proposal. He said:
“We’re at a complete loss as to understand Government’s latest decision to inflict yet more pain with another tax hike on hauliers.
“Road transport operators have made huge strides in adopting cleaner air technologies. Despite this, Government has made it very clear it has no interest in either acknowledging that progress, or in supporting the industry on its journey to an emissions-free future.
“What’s needed is a realistic scrappage scheme that supports our industry during this transition, not a penal approach.”
To conclude, Mr. Burnett added:
“This latest move is aggressive, anti-business and does nothing to reassure the industry responsible for moving 90% of the economy that it’s doing a great job. With Brexit looming this industry needs some good news, the reality is that this latest announcement amounts to little more than delivering another kick to an industry already on its knees.”
The hike comes as a particularly unwelcome surprise as the haulage industry goes through a tenuous and uncertain phase. In the looming shadow of Earned Recognition, governmental support is needed. Instead, hauliers are finding themselves pressed tighter into a corner.