Pay Continental VED on British 0-licence
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by Karen Miles The Department of Transport has confirmed that international hauliers should be able to pay foreign vehicle excise duty rates while their vehicles are on UK Operator's Licences—despite claims to the contrary by transport solicitors.
And OK hauliers who concentrate exclusively on international work can partly flag-out their businesses and legally avoid high rates of UK VED by registering their trucks for ownership in another EU state and paying that country's VED. They can avoid the need to set up foreign depots by keeping the vehicles on their UK 0-licences,
This view—which, for once, is more relaxed than the interpretation given out by specialist lawyers—is not likely to be toughened up by the authorities. The DDT says it has no plans to press its enforcement agencies to bring a test case.
However, transport lawyers argue that strict interpretation of the law indicates that UK hauliers running on UK soil on domestic or international journeys should pay UK rates of VED.
The confusion centres on the interpretation of the word residency" in the 1975 Inter national Circulation Order, which says that vehicle users should be resident abroad to be exempt from UK VED.
The DOT says each case has to be studied individually and the requirement for residency is "not clear cut". For example, it suggests that residency could mean having some drivers based abroad, or setting up a token subsidiary or registered office abroad.
But Ford &
Warren solicitor Stephen Kirkbright and fellow lawyer Ian Rothera argue that an operator should be fully resident abroad to benefit from that state's lower road tax rates. The only way to be exempt (from UK VED) is to be resident abroad,'' says Kirk bright. FLAGGING OUT: THE DOT VIEW ii Partial flagging out International-only operator registers vehicle ownership abroad and pays foreign VED but keeps his vehicles on a UK 0-licence.
• Full flagging out: Emigration of operator and truck. Operator pays foreign VED and puts his vehicles on a foreign 0-licence, Domestic icabotage) and international operations are allowed in UK.
UK domestic operators cannot flag out; they must pay UK VED and keep their vehicles on UK &licences.