DOT backs down on recovery tax
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by Miles Brignall • The Government has slashed the vehicle excise duty rises on recovery operators proposed in last November's Budget. Instead of a maximum £5,000, recovery vehicles will be taxed between £135 and £750 dependent on weight.
The U-turn followed widespread condemnation of the huge tax increases (CM 8-14 December).
Amendments to the Finance Bill, which confirms Budget changes, were tabled by the Treasury last Friday (27 January). The Labour Party and Liberal Democrats had pressed for a reversal in proposed increases to VED levels and fuel duty. The Government defeated opposition fuel duty amendments in Parliament on Monday night (30 January); these increases will now become law.
Many operators faced ruin when the Chancellor Kenneth Clarke increased VED on recovery vehicles from a blanket £85 to £135 for smaller vehicles—and up to £5,000 for top-weight trucks. Recovery operators had warned that stranded hauliers would face long delays as recovery men shed uneconomic, larger vehicles.
Association of Vehicle Recovery Operators president George Graham lobbied the Paymaster General, David Heathcote-Amory, who is responsible for against VED rise, the changes. Graham says the minister agreed that the new rates should be decided on the kerbvveight of the vehicle. The DVLA says the VED levels will be linked to design weights.
Glasgow-based heavy recovery operator Thomas Ash, who runs 12 vehicles, accepts the new charges are an improvement but he warns that recovery charges will still have to rise. "Too many operators are only just making a living," he says. "Some firms are going to look at a truck they only use once a month and say it's got to go. We are going to get to the stage where an owner-driver can't afford to have his truck recovered."
Peter Cosby, the Chairman of the Road Rescue Recovery Association, describes the changes as "a big improvement" but agrees with Ash that the increases at the heavy end of the sector will still result in fewer vehicles on the road.
C VED on recovery vehicles from 1 July: Up to 3.5t, £135; 3.5-12t, £150; 12-25t, £450; above 25 tonnes, £750.