The Department for Transport (DofT) reported recently that since the HGV levy (a tax on foreign freight drivers) was introduced in April 2014 it has generated revenue of approximately £44 million. Good news for the UK government but what exactly does it mean for the foreign hauliers and precisely what will that extra revenue be spent on?
The tax was introduced simply because it was identified by the previous coalition government that the UK would continue to be an attractive location in which to conduct international business, and therefore to ensure that all incoming foreign HGV vehicles over 12 tonnes contributed towards the maintenance of UK roads, it was decided acceptable and fair to introduce a tax in order to levy foreign drivers for the maintenance. The levels of heavy traffic coming into the UK are unlikely to fall and considering the UK is NOT part of the European Monetary Union using the single currency, the coalition government in 2012 rightly predicted that British economic growth would move at faster levels than it has for other EU countries using the Euro. Indeed the UK economy grew in 2014 substantially, but reduced in 2015. Recently UK interest rates were held at 0.5% by the Bank of England in the hope of boosting spending because low inflation turned negative in April at -0.1%. This nullified expectations about the Bank raising rates in 2015 and growth is did eventually improve in 2015 - of course leading to an increase in freight traffic from abroad as UK consumers spend again.
Over the course of the previous year (during most of 2014) the HGV levy, introduced 1st April 2014, raised several million from foreign HGVs, Transport Minister Robert Goodwill announced back in March 2015.
Public data now shows that approximately 1.8 million levies have been purchased for foreign truck operators from more than 90 countries (including more than 50 non-EU countries) since in was introduce in 2014, proving the government made the right decision to introduce it. Originally there was some opposition from British business, concerned that UK imports levels would be adversely affected due to the levy charge, but in fact it was supported by the British haulage industry.
Why did the UK Haulage industry support the Levy?
UK-registered vehicles travelling to the continent regularly pay their way through tolls and user charges in France, Germany, Spain - many countries (anyone who has ever driven a car across Europe can get quickly disheartened by the amount of toll-roads). UK businesses felt it fair that foreign HGVs are not exempt from charges in this country. The UK government assure that the revenue generated will be pumped back into maintaining and repairing key freight routes. Jack Semple, Policy Director at the Road Haulage Association (RHA) said:
"The levy is a success story. The RHA had very productive discussions with the Department for Transport as the scheme was being developed. A year on from launch, the levy appears to be delivering for the haulage industry exactly what we were hoping for. Top payers include operators from Poland, who account for more than 26%, Romania have purchased nearly 12% and Spain who have purchased over 8% of all foreign levies."
Be mindful that if a levy is not paid, the driver faces a £300 roadside fine. Since implementation began, enforcement agencies have issued more than 2,000 fixed penalty notices and collected fines of over £700,000.
Check out more info about the HGV road levy: Freightlink Guide: HGV Levy - Road Tax