Traffic commissioners offer advice on new financial standing tests02 December 2016

Operators who are planning to apply for more vehicles, upgrade their licences or are due to appear at a hearing in the New Year will be asked to provide evidence of financial standing at the new rates.

Traffic commissioners are therefore offering advice to help operators and licence applicants to prepare for the new financial standing tests.

The new levels, which take effect on 1 January, are based on the Euro exchange rate on the first working day of October each year.

The requirement for the first vehicle on a standard licence or application will be £7,850 and for each additional vehicle it will be £4,350. Rates for restricted licence operators and new applicants are unchanged.

The main sources of financial evidence are: bank or building society accounts; credit card statements; overdraft facilities; invoice finance agreements; audited accounts; and assets that can be sold quickly (except for vehicle fleet).

If an operator cannot show financial standing at the new rates using this evidence, they can apply in writing for a ‘period of grace’ – up to six months may be granted to address the shortfall.

The regulator is also reminding operators of the alternative options. Since financial standing is assessed on the number of vehicles authorised on the licence, regardless of how many are in operation, operators could consider reducing that margin without affecting operational vehicles.

Senior traffic commissioner Beverley Bell said: “Traffic commissioners understand some standard operators and licence applicants may be concerned about the increase to the standard licence financial standing levels for 2017.

“The financial standing requirement is mandatory so we have to apply the rates to all operators and licence applicants... We want to make sure operators and licence applicants know what they can do if they are not able to meet the new rates through the traditional methods, such as bank statements.

“In certain circumstances, traffic commissioners can give operators time to address any shortfall in the financial standing requirements through a period of grace.

“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.”

Author
Laura Cork

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