Changes to O-licence for LCVs going to Europe - explained18 May 2022

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From 21 May 2022, the law will update to bring more vans and car/trailer combinations into scope for requiring a goods vehicle operator licence when used internationally – including between Northern Ireland and Eire. Lucy Radley explains the O-licensing system for newcomers

Currently the rule covers all vans and vehicle combinations used for hire or reward with a maximum authorised mass (MAM) of 3.5 tonnes and above. The new regulation brings the MAM threshold down to 2.5 tonnes.

As a result, there are a good number of operators who will now need to learn about operator licensing for the first time. For clarity, however, it is important to remember that this only applies to those transporting goods a) for hire or reward and b) in the EU, Iceland, Liechtenstein, Norway and Switzerland. For operators that are only transporting their own goods, or which only use their vehicles in the UK, nothing will change.

For the benefit of those operators new to the system, traffic commissioners (TCs) are the independent regulators of the heavy commercial vehicle sector, and the people who issue operator licences. It is the TCs who, ultimately, operators must satisfy that they are operating to the expected standards. If they get it wrong, it is the TC who may suspend or even revoke their O licence, effectively expelling them from the industry.

Before even applying, operators need to acquire a transport manager to be named on the licence application. Normally that transport manager would need to be someone holding the Transport Manager Certificate of Professional Competence (CPC), and would need to either be employed by the operator on a full-time basis, or hired in as an external transport manager. In this instance, however, there is the option to have an existing member of staff temporarily recognised as a transport manager, giving them until 21 May 2025 to complete their CPC.

To use this option, the person concerned needs to show they have at least 10 years’ experience managing fleets of vehicles before 20 August 2020. Unfortunately there is no formal guidance on how to do that, points out James Firth, head of road freight regulation policy at Logistics UK. “You need to be able to demonstrate a real link with an operator that has been operating vans,” Firth advises. “ So an employment contract, for example.”

While DfT is keeping relatively tight-lipped about the details, it is known that some transport manager entitlements have been issued, and that the number which have been issued is fewer than the number of applicants. “That shows us that they do have a standard that must be met, and that this isn’t just a ‘tick in the box’ exercise,” Firth confirms.

While using ‘acquired rights’ like this may seem like the easiest route to take at first glance, in reality those operators which are new to the system would be better off either employing or hiring in an existing CPC-holder, not least because they will then have the knowledge of how to apply for and operate within the system. Temporary transport managers have the added burden of needing to learn this, alongside trying to perform the rest of their day-to-day role within the business.

For the purposes of the licence application itself, the operator must be able to demonstrate various conditions can be met. One of these is usually that the vehicle must be kept at a designated operating centre, which is the address to which the licence is issued.

“But it is not uncommon, in the van world, for drivers to take their vehicles home and park them on the road outside their house,” Firth explains, “and that will still be okay. If you are a van-only operator, you do not need to have an operating centre.” In addition, he states that operators of a mixed fleet which includes heavy vehicles won’t need to designate parking areas for the vans.


This does not, however, mean you can use a “brass plate”, or representative address for your application. “It would need to be a place in which you are established,” Firth says.

“So an address that appears on your documents as a business, or is registered at Companies House. It’s about making sure there’s a presence in the UK as an operator: showing that you’re not a company outside the UK which is just sending vehicles to operate, which is what this bringing of the vans into scope is intended to address.”

That’s something worth remembering. This change is aimed squarely at vehicles like the ubiquitous 3.5-tonne curtainsided van with a sleeper pod above the cab, many of which are registered, owned and operated from abroad. “If they’re now within the realms of operator licensing, they would have to return to their country of establishment regularly,” Firth points out. “Which you would presume, at that size, is no longer worthwhile.”

The other piece of evidence required – apart from the registration and the MAM of each vehicle which will be on the licence, of course – is of financial standing. “The Office of the Traffic Commissioner (OTC) tells us the most common reason for an incomplete application is not understanding the requirements to show financial standing, and how it need to be demonstrated,” Firth says. Operators need to show that they have access to £1,600 for the first van in their fleet, then another £800 for each van after that. So for three vans that would be £1,600 (for the first) plus £800 (for the second) and £800 (for the third), giving a total amount of £3,200 which needs to be demonstrated.

This money needs to be available at all times while the licence is in force. There are various ways of showing this, the detail of which is set out in the traffic commissioners’ statutory guidance and directions (see

“The most straightforward way to demonstrate financial standing is to prove you’ve got cash at the bank,” he adds. “And that it stays there consistently, month on month.” The other straightforward way for larger businesses is a set of audited accounts that will then demonstrate the habit. There are other possibilities, including having some of the money available on a credit card balance, or access to loans. “But the TC will want to see assurances you can genuinely access that,” Firth cautions, “and that it’s not tied up in any other sorts of agreements.”

Finally, a quick word on good repute, which must be demonstrated by transport managers and operators, in order to show they are fit to hold a licence. In practice this is a process of exclusion, in that certain convictions automatically remove an applicant’s repute, rather than conferring it. The TC must find against an operator’s repute if they have committed one or more serious offence, defined as being:

  • imprisonment exceeding three months
  • a fine exceeding level 4 on the standard scale, currently £2,500
  • a community order (or equivalent) requiring unpaid work for more than 60 hours, or a community payback order requiring unpaid work, or unpaid work and other activity, to be undertaken for more than 60 hours
  • any punishment outside the UK corresponding to the above.

Other disqualifying offences include, but are not limited to, traffic offences relating to drivers’ hours legislation, weights and dimensions of commercial vehicles, road or vehicle safety, or environmental protection.

Lucy Radley

Related Companies
Freight Transport Association Ltd

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