Higher HGV road user levy set to put a strain on haulage industry

The government has been focusing on many environmental issues recently, not least improving air quality across the country. One way in which it is proposing to make progress with this is to increase the road user levy for HGV drivers from February 2019.

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The increase in the levy is targeted at older vehicles and will most impact hauliers with an older fleet. The plans are to increase the rates by 20 per cent, with the older Euro 5 vehicles affected by the highest increases. At the other end of the rate rise, UK-registered Euro 6 trucks will see their rates reduced by 10 per cent.

The two schools of thought see this either as a penalty for firms with an ageing fleet, which are already arguably cash-strapped, or as a reward for firms that take the incentive to upgrade their lorries.

The levy

The levy is not a new concept. It has been in place for some time, although the rates will rise in February. It applies to larger vehicles weighing 12 tonnes+ and varies depending on several factors, including the axle configuration or the weight of the HGV.

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Funds raised from the increase will be put towards improving the quality of road surfaces and limiting pollution. The maximum 20 per cent levy will impact companies with older vehicles and will have an effect on the operations of some business – especially those with several HGVs, as their levy could rise from £1,000 to £1,200 each.

Payments will be collected by DVLA in conjunction with the vehicle excise duty. The Freight Transport Association (FTA) and the Road Haulage Association (RHA) have reacted angrily. They believe that the increase is unfair, as progress was already being made, and that the proposals are more of a demotivation than an inspiration.

For more information on the road user levy for HGV drivers, visit the government website.

With the new rates of the levy coming into play, it might be time to review your HGV insurance. There might be savings to be made, so consult specialist insurance providers such as https://www.quotemetoday.co.uk/hgv-insurance.

Since the announcement of the increase for older vehicles, their value has dropped significantly; therefore, businesses that might already have been struggling to afford to upgrade are likely to find it even harder.

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