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Confusion over flagging out

15th July 1999, Page 6
15th July 1999
Page 6
Page 6, 15th July 1999 — Confusion over flagging out
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Which of the following most accurately describes the problem?

.8 by Karen Miles and Sally Nash

The Department of Transport is making it harder for operators to flag out their fleets after changing its view on the law surrounding this practice.

In a move which will anger operators acting on recent guidelines from the DOT, officials now say they believe hauliers wishing to take advantage of cheaper vehicle excise duty overseas would be safer legally if they established a permanent operating centre abroad.

In a letter to solicitors Ford & Warren the DOT says it feels operators who flag out partially (register vehicles abroad on a UK 0-licence) will be less favourably received than those setting up abroad: "The courts are likely to consider that the situation of an operator which simply reregisters abroad is very different from the one where an operator establishes a permanent base abroad (where the vehicles are maintained, etc)," it concludes.

Only a month ago hauliers were being told that having some drivers based abroad or setting up a token subsidiary in another country could be enough to establish residency—allowing the haulier to pay local rates of VED while retaining the convenience of keeping the vehicles on its UK 0licence (CM 10-16 June).

The DOT refutes any criticism of this change of advice, saying it has "refined" its opinion after "intense scrutiny" of the relevant regulations by itself, solicitors and hauliers because of increasing interest in flagging out over the past few months.

"The courts will interpret the law," says one official. We can only give guidelines, and they are not carte blanche to sally forth."

But the DOT is not instructing the enforcement agencies to bring a test case to clarify the law, despite calls from some hauliers. "This issue [partial flagging out] really does need to go to court and then we would know if it is legal or not," says Mike Beer. of Kent-based Mike Beer Transport.

Fellow Kent haulier and Trans-Action organiser Frank Steers is considering partial flagging out: he is angered by the DC T's attitude. "The ministry can't keep changing its mind," he says.

• See news analysis on page 11 for a review of the current situation.

Tags

Organisations: Department of Transport
Locations: Kent

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