Budget VED changes work amst triaxle campaign
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by Charles Young The government's policy of encouraging hauliers to buy three-axle tractive units came unstuck last week when new tax rates announced in the Budget gave hauliers an incentive to stick with two axles.
Following a substantial reduction in the relevant tax bracket, it is now cheaper to run at 40 tonnes on five axles than at 41 tonnes on six, provided the vehicle covers more than 62,000km a year.
Although the VED rate for 41-tonners is still £1,450 cheaper than for 40-banners, the overall costs for a 40 -tanner will be lower because it has better fuel consumption, cheaper tyre costs and is cheaper to buy in the first place.
The announcement will anger hundreds of hauliers who invested in three-axle units and in some cases sold their two-axle trucks at a depressed value. It also makes a mockery of the government's push away from the road-damaging two-axled units.
These hauliers face further disap
pointment when they realise there is no £500 VED reduction for their trucks if they are taxed at the £2,500 VED rate.
In his Budget speech last week. Chancellor Gordon Brown said there would be a £500 reduction for 41tanners. But Brown was referring to the little-used rate of £4,250 for a 41-tonner which can also pull lower weights with fewer trailer axles. This rate is now set at £3.750.
However, according to calculations by CM'S technical editor Toby Clark, international 4D-tonne operators running on two axles start saving money after covering just 62,000km a year when all the addi bonal costs of running three-ailed units are considered. They also have the additional benefit of being able to fit larger fuel tanks, enabling them to bring more cheap foreign fuel into the UK.
One disadvantage of buying two-axle trucks will be the chance of running at 44 tonnes when it is introduced for general haulage next January. But Ken Moore, technical support manager at Iveco Ford. says many hauliers will not be put off.
"The thing that drinks fuel most in a truck is its weight," he points out. "so not everyone will want to go to 44 tonnes unless they are absolutely sure they will get the additional revenue."