auliers hit b huge hikes in duty by Nicky Clarke
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and Amanda Bradbury • Hauliers face a financial hammering over the next four weeks in which they will see they costs soar from a two-pronged attack.
The Operators Licence fee will jump 143% and vehicle excise duty, fuel tax and VAT are set to rise in the Budget on 16 March.
The haulage industry is furious that despite a consultation period, the DOT is forging ahead with its plans to hike the five-year 0-licence fee by £100 to £170 on 1 April. The £28 vehicle charge will remain unchanged (CM12-18 Nov 1992).
A one pence increase on the price of derv, an acrossthe-board-increase in VED and the introduction of VAT on diesel and services are likely to hit hauliers to the tune of £100m. Worst hit will be small operators: hauliers could pay up to £600 extra running costs per vehicle, (see table on opposite page).
"The Budget could be crippling for hauliers. There's got to be an increase in fuel duty and VAT because the Government has got to claw some money back," says Road Haulage Association operations director Tim Inman.
The Government has already said it needs to find an extra £100m from the Budget to pay for last autumn's abolition of special tax on new cars.
The Freight Transport Association condemns the 0licence increase as "insensitive to the economic situation faced by industry and a blatant contradiction of the Government's own anti-inflationary strategy".
The DOT says the rise is necessary because of the continuing deficit between the cost of goods vehicle operator licensing and a downturn in demand for 0licences over the past two years.
Senior Traffic Commissioner Air Vice-Marshall Ronald Ashford of the Western region says he has seen a 12% downturn in business over the past year and a greater downturn in the number of vehicles on 0-licences.
Administration and enforcement of the 0-licensing system has been running at a deficit of about £2m a year for the past five years and has been subsidised by the taxpayer, says the DOT The annual deficit in 1993/4 is expected to be £4.5m. The 1991 increase of £10 was not enough to cover costs of the licensing system, says the DOT The structure of the 0-licence fee is still under review so that hauliers "pay the full administrative cost for a licence". Any changes will be made next year. The DOT wants to see more flexibility to reflect fluctuations in 0licence demand.
It is thought that the present charge of £70 does not even cover the cost of processing an application; it is estimated to be in the region of £230.
Industry backs the idea of the introduction of a non-returnable fee payable at the time of application, as some applications are never taken up by operators but bear the cost of of processing by Traffic Area Offices.
"That would spread costs and let them fall where they lie," says Ashford. He would like to see licences backdated as they can take up to six months to obtain, resulting in a loss of revenue for the DOT Regulations to increase 0licence fees were put before Parliament last week.
Also under review is the whole goods vehicle licensing system. A DOT working party is considering proposals to introduce continuous 0-licensing, that were first made in 1990.