From 1st January 2017, financial standing requirements for standard national and international licence holders will rise by a staggering 18%.
This follows the annual assessment of the exchange rate between the pound and euro on the first working day of October, by the department for transport. Under EU legislation the current rate is set at €9,000 for the first vehicle and €5,000 for each additional vehicle. Therefore vehicle one will require £7850, and £4350 for each subsequent vehicle. It is a vast increase and the result of a fluctuating pound in the wake of the vote to leave the EU.
Struggling with the increase in financial standing?
In light of the changes, the Office of the Traffic Commissioner has stated that they will consider offering a period of grace of up to 6 months (but no longer) to struggling operators. This is purely for the purpose of meeting the financial standing levels on a permanent basis. Failure to do so could lead to regulatory action.
To apply for a period of grace, it must be requested in writing to the Traffic Commissioner and offer tangible evidence that financial standing will be met when the period of grace ends.
Senior Traffic Commissioner, Beverley Bell, said: “The financial standing requirement is mandatory so we have to apply the rates to all operators and licence applicants. However, we recognise that some businesses will feel the impact of the increase more immediately.
“We have advised staff dealing with applications and regulatory hearings to be mindful of the impact of the increase when dealing with operators and giving advice on alternative ways of satisfying the new rates,” she added.
The rates for restricted O-licence holders will remain at the current levels set at £3,100 for the first vehicle and £1,700 for each subsequent vehicle nominated on the licence.
Financial standing can be evidenced using:
- Bank Accounts
- Credit Cards
- Overdraft Facilities
- Factoring Agreements
Alternatively, operators have the option to reduce the authorisation on their licence in line with available finance. This can be done by completing a variation application (available from the Traffic Commissioners website).
If still unable to satisfy the requirement, call us and we will help you to explore alternative options available to you to demonstrate finance.
For a free consultation, call Jonny Bell on 01829 773 100.