Tuesday, April 1, 2014

Road Haulage and Freight Interests Welcome Inception of New HGV Levy

From Now On Overseas Hauliers Pay to Go on British Roads
Shipping News Feature

UK – Today sees the introduction of the HGV Road User Levy which will be imposed on ALL heavy goods vehicles (HGVs) of 12 tonnes or more, for UK operators this will be payable when they pay their vehicle excise duty (VED) but, according to the Department for Transport (DfT) the cost will be offset by a reduction in the VED charge. The move to charge foreign operators has been demanded for many years by bodies such as the Road Haulage Association (RHA) and the Freight Transport Association (FTA) which have pointed out the inequality of UK hauliers having to pay road tolls via the Eurovignette scheme for the upkeep of continental highways.

The scheme is to be operated by Northgate Public Services in conjunction with the DfT and is a time-based charge that must be paid by all heavy goods vehicles (HGVs) of 12 tonnes or more. It applies to UK and foreign registered HGVs, using UK roads from 1 April 2014. Northgate has responsibility for the design and operation of the payment system and associated database that operators and drivers of non-UK registered HGVs will use to purchase the Levy before the vehicle enters the UK. An estimated 130,000 individual foreign HGVs enter the UK each year making a total of 1.5 million trips. Overseas operators can register to pay here and more information on the scheme here.

The system will enable foreign operators, drivers or booking agents to purchase the Levy in advance of a vehicle using UK roads through a number of sales channels. Foreign operators can pay daily, weekly, monthly or annually depending on their operational requirements, with discounts available for longer levy periods. FOPS is available in six major European languages.

The Levy can be paid in one of two ways. Operators making regular journeys to the UK can set up a registered account whereby vehicle details are pre-loaded into the system. Alternatively, where vehicles make infrequent trips to the UK, the Levy can be paid on a ‘pay and go’ basis. When the ‘pay and go’ payment method is used, users will see pictures to help those who might not speak one of the available languages, and the vehicle details must be entered each time a levy is bought.

Registered account transactions are undertaken entirely online. For pay and go transactions, the driver has a choice of online, telephone or at point of sale terminals. Northgate is enabling payment over the telephone through its multi-lingual contact centre, which will also support customer service queries. Drivers will be able to pay the levy by card or cash at the physical points of sale, which will be located at truck stops before entering the UK and on some ferries. Drivers will be able to top-up their levy at a limited number of point of sale sites in the UK.

The FOPS includes a database of foreign HGVs that have paid the levy. This will provide the ability for drivers to check the levy status of their vehicle through a public register. This can be accessed via a free web portal, or through a ‘text to check’ service using a cloud based infrastructure. The database will also enable authorities to identify and take action against HGVs which have not paid, or potentially underpaid the levy. Dave Meaden, Chief Executive Officer, Northgate Public Services said:

“The Department for Transport and Northgate Public Services have worked constructively together to deliver this innovative scheme to the April 2014 deadline, 12 months earlier than originally envisaged. We have a solid and successful track record in creating systems that are focused on enabling the public and creating more effective and efficient government services. Examples include the Blue Badge Service and our council tax collection system, which recovers over £16 billion per year. We are delighted today to launch the HGV Levy Payment Service.”

The Freight Transport Association (FTA) has welcomed the scheme having continuously called for something along these lines for many years and when responding to the consultation on the HGV Road User Levy in January 2012, the FTA had three conditions of support of the scheme i.e. UK hauliers would be compensated via the VED payment, the cost and administration would not be greater than buying the normal VED disc and there must be significant penalties for anyone attempting to evade payment. Karen Dee, FTA Director of Policy said:

“The FTA has consistently supported the introduction of the HGV Road User Levy. Until now operators of foreign HGVs have paid nothing in UK taxes. They pay vehicle tax in their own country, and buy low-taxed diesel before entering the UK, and in so doing save up to £200 on a full tank of fuel. The levy won’t fully redress this imbalance in costs, but it does create a fairer arrangement for UK operators.

“Road charges and tolls are part and parcel of operating a truck on the continent. It is only right that foreign HGVs using UK roads should do the same. The FTA believes that the benefits of the HGV levy for UK operators will go beyond the charge that foreign carriers must pay. The associated extension and upgrading of the DVSA and DVA roadside enforcement cameras network offers the potential for more effective enforcement of foreign HGV safety standards.”

The RHA Director of Policy Jack Semple also emphasised his organisation’s support for the scheme and praised the former Transport Secretary for the introduction of a measure that goes some way to levelling the playing field for UK hauliers, saying:

“The levy means that visiting hauliers are legally required to contribute to the cost of our roads for the first time. It also does what is possible, within EU law, to level the playing field between UK hauliers and those from the continent and Ireland. Philip Hammond, when he was transport secretary, committed the Coalition to bringing the scheme in during this Parliament and we are pleased that Patrick McLoughlin is bringing in the measure so promptly, a year ahead of deadline.

“Visiting hauliers [now] have to pay and the DVSA (formerly VOSA) is geared up for immediate enforcement. It is business as usual for the UK industry – British truck operators will pay the levy at the same time as vehicle excise duty. The DfT and the Treasury have worked to ensure that the scheme keeps the impact on the UK industry to an absolute minimum and have engaged constructively with the RHA in achieving that.”