Driver Licence checking service
 
Truck

Financial Standing

Introduction
HGV's Paragraph 6 of Schedule 3 of the Goods Vehicle (Licensing of Operators) Act 1985 ('the Act') requires all Applicants or Holders of a Standard Licence (National or International) to have sufficient financial resources available to ensure the establishment and proper administration of the road transport undertaking that is or is proposed to be carried on. Simply, there have to be sufficient funds available to the operator to ensure that he/she can properly finance the operation including properly maintaining vehicles.

The Cost
The level of financial standing is set by legislation and the total sum is based on the number of vehicles multiplied by the current statutory figure. The figures below are current and came into effect on 1st January 2012.

  • Licence type - Restricted
  • First Authorised Vehicle HGV - 3,100
  • Each Additional Authorised HGV - 1,700
  • Licence type - Standard National
  • First Authorised Vehicle HGV - 7,700
  • Each Additional Authorised HGV - 4,200
  • Licence type - Standard International
  • First Authorised Vehicle HGV - 7,700
  • Each Additional Authorised HGV - 4,200
Key Information
Key Information
An operator requiring a Standard National Operators Licence for 5 vehicles would require to show a Financial Standing of:-

1 x 7,700 + 4 x 4,200
= 24,500

Proof of Financial Standing
There are a number of ways that Financial Standing can be proved and applicants and Holders alike are recommended to read and take note of the 'Financial Evidence and Operator Licensing Guidance, both of which can be downloaded below:-

Financial EvidencePDF logo

'O' Licence GuidancePDF logo

VOSA have issued a Practice Direction on what may be acceptable as Proof of Financial Standing for which the below list is taken but it should not be considered exhaustive and the operator needs to make his/her own further enquiries:-

[back to top]


The following are not acceptable as evidence:

Operators will be asked at the five-yearly administrative renewal of their licence to demonstrate that they continue to meet the requirement to be of appropriate financial standing.

[back to top]

Maintaining Financial Standing
Maintaining the level of Financial Standing appropriate for the number of authorised vehicles is a continuing obligation and the onus is on the operator to do so. Not only must he do so, but the correct sums must be capable of being demonstrated and be readily available. Failure to do so could lead to revocation of the licence.

The following non-exhaustive points have been held by the Transport Tribunal as being applicable to Financial Standing:-

Sources of Finance
As set out above, Financial Standing may be proved in a number of ways such as asset based lending, factoring and invoice discounting. Operators should carefully consider the most appropriate way to finance their businesses and take good independent financial advice from a reputable firm of advisors.

Tenon Group plc was formed with the objective of becoming the first choice provider of business advisory services to ambitious businesses of all sizes, across the country. Tenon has over 1,700 staff operating through a network of 38 offices in the UK offering local and national expertise, which is reflected in its status as a UK Top 10 accounting firm. Their principal objective is to create a business characterised by a culture of excellence, providing specialist expertise across a range of advisory services, which include:

[back to top]


Copyright © 2007 - | Transports Friend